YOU ASK:

For buying a property which one is safer, warranty deeds or title insurance?

WE ANSWER:

If you want to be on the safe side, you should get title insurance. A warranty deed is useful for as long as the owner is alive or has the capacity to pay. When the one who issued the warranty deed dies or is declared bankrupt, then that warranty deed is as good as the paper it's written on.

As a background, a warranty deed is usually issued by the seller to guarantee that the title or deed being transferred is free from any encumbrance, lien or obligation to other parties. This is a legal instrument that is executed when the real estate transaction is closed. The warranty deed should be duly notarized and witnessed, according to the applicable laws in the state where the sale is being consummated or where the property is located.

A title insurance policy is much safer because it remains in force until such time that the buyer decides to sell the property. At that time, the insurance coverage is terminated since the owner has no interests to protect with regards to the property.

Title insurance will be there to pay for financial loss due to a covered cause. The coverage of title insurance is much wider, as it provides for a longer list of things that can possibly happen that can impair your ownership of the property and may even result in title loss.

One other difference with title insurance is that it only works to protect the ownership interest of the buyer. It has nothing to do with the transfer of ownership from one party to another.

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