The housing market has had a tumultuous year marked by low inventory and high interest rates that have driven prices to record levels. Prospective first-time buyers hope to change by 2025, and while there are predictions that they may have an easier time getting into a home, much will depend on the state of the economy and the policy priorities of the new Trump Administration and Congress. .
This is an important time for the real estate industry, and the title insurance industry in particular. Title companies play an important role in the home buying journey. Looking ahead to 2025, we will focus on highlighting the importance of title insurance as the strongest protection of Americans’ rights, educating consumers about title insurance, and continuing to adapt and innovate to help our industry serve consumers more effectively.
The journey to homeownership can be difficult for prospective buyers, and the last thing a new homeowner wants to worry about is a title issue that threatens their ownership.
The mere fact that the house is for sale is not a sure sign of a clear title; there may be a previous defect that hasn’t surfaced or a new one that the current owner/dealer doesn’t even know exists. A title insurance professional can remove any uncertainty and protect against hidden risks or liabilities. With a clear title in hand, and insurance to cover unforeseen risks, the real estate project has the green light to proceed.
Title insurance provides an extraordinary level of protection for homeowners. If a tax lien, or other claim arises against their property, the policy covers any legal costs incurred to defend that claim. Homeowners with title insurance policies are covered in one important way: by state laws that govern industry practices and standards, and by federal laws that require title companies to disclose payments at closing to a buyer.
This is not the case with less secure alternatives, such as attorney opinion letters, which fail to afford the same protections as title insurance warranties, provide limited coverage for potential risks, and require only one public records check. These books have been around for a long time as title insurance, but they are very risky. If a title problem arises, there is no “duty to defend,” for example, and the homeowner is left to fight the claim alone.
It’s important for buyers to know this difference, whether they’re buying a home now, waiting for the housing market to improve, or deciding to refinance their current home.
Despite living in the digital age, it is important for consumers to understand that only 70% of public records are digitized. Seasonal subject matter experts have the ability to comprehensively search the public record for subject matter impairment; they delve deep into the physical and online world, divorce, and bankruptcy records and financial actions and judgments. And importantly, title insurance is a one-time payment that also protects homeowners from any “hidden” title risks that may arise later.
Due to innovation in the industry, the cost of title insurance has decreased by 5% over the past five years. The industry has embraced emerging technologies to improve and streamline its operations, including remote online information, which gives consumers the ability to close transactions without leaving the safety of their home. Title companies are also adopting technology tools to better communicate with consumers and work more efficiently. Moving forward, the title industry will continue to explore new ways to make home ownership more accessible through innovation.
Much is unknown about what the housing market will look like in 2025, but one thing is certain: the title insurance industry will continue our unwavering commitment to protecting the rights of the American people.
Richard Welshons is the president of ALTA.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected].
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