Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
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Home Buyers Should Know How To Protect Themselves
Many buyers are unaware of the type of Title Insurance they are paying for when buying a home. In Home Buying 103 I briefly covered the different types of policies buyers should be looking for. Questions to ask:
- What type of coverage am I getting?
- What type of policies are available?
- How much will additional coverage cost?
- What does each type of policy cover?
A recent home buyer, who happens to be an agent in our office, has faced numerous mechanic’s liens on his newly acquired property. Not paying attention to the type of policy he received from the title company, he ended up with a standard policy. Now he has over $15,000 in liens against his property with no insurance to cover. I solicited the assistance of Dina De La Ossa, Escrow Officer, to help explain.
Dina recommends, “Keep in mind that not all Purchase Contracts include the issuance of the highest coverage available. On New Construction Properties, the commonest issued policy is a Standard Policy. This is precisely because of the mechanic’s liens that can be filed up to 180 days after occupancy. If the Buyer wants to upgrade to HomeOwner’s Policy, they can, but not until AFTER the 180 day waiting period. All the more reason to be aware of your homebuilder - Are they financially sound? Are they paying their bills? You do not want to get stuck in this sticky situation.”
Explanation of Policy Coverage
Dina adds, “Looking for “ALTA” on the policy is not a guarantee either. ALTA simply stands for American Land Title Association. Always ask what is the best coverage available? Typically it will be called the (”ALTA”) Home-Owners Policy.”
If you have more questions feel free to contact Dina, from Title Security Agency of Arizona. Hopefully this information will help save someone the headaches they may face with mechanic’s liens or other problems that can arise.
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How true that is. Recently, we had our first Home Builder go out of business (actually sold his family business after $5 million in liens by unpaid subcontractors)and the new homeowners in a partial finished subdivision were then slapped with mechanic liens on their new homes by these same subcontractors.
Pretty hard lesson but one that you are keeping your readers aware of.
October 4th, 2007 // Sacramento Real Estate
Gena - Thank you. The sad thing was this is a Realtor who should know better and check. Most buyers have no clue and rely on us for guidance. If a few home buyers are saved the frustration and possible devastation from large liens then this is well worth the posting.
October 4th, 2007 // Doug