When you’re buying a home, you may have heard it’s necessary to have title insurance. This protects you from previous problems with the property such as liens and other problems with the title. It makes sense that you’d need title insurance with a home that’s changed hands many times over several decades. But what about a newly constructed home?


You might be surprised to learn that title insurance is just as necessary for a new construction home as it is for an older property. That’s why our team of title closers at Liberty Title in Minnesota has put together this guide to title insurance and new construction homes.


The Purpose of Title Insurance

Title insurance is important because it protects you and your lender from problems with the title. It’s not uncommon on an older home to encounter a name that was not transferred correctly or an error in public records on the description of the property. Title insurance is meant to protect you or your lender from costs down the road. It can also protect you if for some reason you lose your claim to your title.


Here are a few problems that can come up when closing on a new construction home:


1.      Mechanic’s liens

Your builder may use several contractors during the construction of a home. This includes everyone from roofing contractors to electricians. Even experienced builders with a good track record can encounter unexpected glitches in the building process. If any of them go unpaid during the process, your home can end up with a mechanic’s lien. A mechanic’s lien will cause your title not to be marketable.


2.      Problems with the land deed

The home might be new, but the land has probably been bought and sold many times over the years. There are all kinds of problems that can come up with a parcel of land. This can include easements or problems with the deed of the land. Problems like missing heirs that can affect an older home can affect a new construction home, too.


3.      Incorrect information on the property

Part of an examiner’s job is to make sure that the information on the property is correct on the title. If there’s a pond on the land that isn’t recorded or the boundaries are incorrectly recorded, this can cause a problem for the title. Title insurance protects you so no disputes or inaccuracies can end up costing you money.



Minnesota Buyer Title Insurance Protection

The decision to purchase a home is one of the biggest decisions you can make. It’s also one of the most rewarding. But if anything happens that threatens your claim to the title, your dream can turn into a serious headache if you’re not protected.


That’s why it’s important to have a strong team behind you throughout the process. At Liberty Title in Minnesota, we offer complete title closing services including in-house legal support. Call our title closing experts at 763.494.0340, or contact us to learn more.