By: Rick Davis
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Marketable v. Insurable Title
Rick recently shared some thoughts on this issue with the Land Rush Now blog.
“All marketable title is insurable, but not all insurable title is marketable,” says Rick Davis, an attorney who specializes in real estate law. A marketable title must be free of any issues regarding the chain of title, that is, the history of ownership, in order for it to be considered as such. If a title is marketable, it can be easily transferred to a new owner without any claims being made by another party.
Rick Davis advises that “whenever a homeowner is purchasing a property with insurable, but not marketable title, they should be careful to understand exactly what title defects are present,” so it’s important that you don’t panic, since those issues can be easily resolved to make the title marketable. He cites the primary reason to use insurable title is for acquiring a REO property from a bank.
Rick warns that the property owner “may have to participate in litigation or in some cases take a cash payment from the title insurance company in exchange for the home.” Obviously, this is a case most property owners would like to avoid at all costs.