All real estate in Tennessee has a title that describes everything about the property, including ownership, boundaries, easements and other matters. When someone purchases the property, he or she receives the deed showing that the previous owner transferred the title of the real estate to the new owner. 

According to the Consumer Financial Protection Bureau, in order to prevent any mistakes on the title from causing problems for the new owner, he or she should purchase title insurance 

In the case of a mortgage, the lender will probably require that the new owner purchase a policy for lender’s title insurance so that the amount of the mortgage is protected. However, owners should have their own policy, as well.  

Why is the policy so important? 

Title problems are more common than many people may think. Discover.com notes that when a title investigator researches a title, he or she uncovers problems in about a third of the cases. These issues may include: 

  • Unpaid taxes 
  • Mechanic’s lien 
  • Undisclosed owners 
  • Forgeries 
  • Omissions or mistakes in the deed 

Ideally, these are uncovered before the property is purchased. If some issue is not revealed until later, though, the problem could become complicated. For example, perhaps the owner inherited the property from a parent and sold it without including a sibling in the sale, but the sibling was a co-owner. If the sibling did not participate in the sale of the property, the sale may not be legitimate. Title insurance protects the investment of the buyer from an issue such as this.