What is a title?
A title is an ownership right to real property. It is very important to have
clear title to the property you own. An owner should have a right to possess and
use the property without unknown encumbrances. Contrary to the belief of some a
title runs with real estate and does not just begin when a house Is built.
What is a title search?
A title search is a detailed examination of the historical records
concerning a specific property. These records are found in the local registry of
deeds and include deeds, probate records, court records and many other
documents. The purpose of the search is to verify the seller's right to transfer
ownership, and to discover any claims, defects and other rights or burdens on
the property. A title search is also used by lenders to verify ownership and
clear title for mortgage purposes.
What can a title search reveal?
A title search can find many title defects, liens, as well as other
encumbrances and restrictions. Examples of possible encumbrances are unpaid
local and federal taxes, unsatisfied mortgages, court judgments and executions,
the rights of others and heirs against the current and past owners and
restrictions limiting the use of the land.
Will a title search/exam find every title problem?
No. There are some encumbrances that may not be found during a title search.
These problems may or may not affect an owner's enjoyment of their property.
Examples are, fraud, forgery, defective notary, the mental incompetence of a
grantor, clerical errors, unrecorded zoning and housing code violations as well
as restrictions caused when a home is placed on a list of national historical
buildings. These and other defects can arise either before or after you buy your
home and can jeopardize your right to ownership. This is the reason title
insurance is important.
What is title insurance?
An owner's policy of title insurance is your protection against loss due to
an unknown or missed encumbrances which results in a claim against your ownership
or right to enjoyment of real estate. A mortgagee policy is usually required by
lenders and protects their mortgage interest.
What can happen if a claim is filed against my property?
Depending on the claim. You could lose your home and property - and still be
liable to pay off the balance of your mortgage. Usually title claims are small
and only require a real estate attorney and/or title company to correct a minor
typographical error or file the appropriate documents. However, all claims may
cost you money and time.
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How does title insurance protect my investment against a claim?
If a claim is made against the title of your property, title insurance will,
in accordance with the terms of your policy, assure you of a legal defense - and
pay all court costs and related fees. Also, if the claim proves valid, you will
be reimbursed for your actual loss up to the face amount of the policy, minus
mortgage payoffs.
Will having an attorney certify title protect me?
An attorney's certification or opinion is formed from his/her experience and
a title exam. It is important to have legal representation before and during a
closing to protect your rights, however this representation will not insure
title. Again, this is the job of title insurance.
Is the owners/seller title insurance transferable to a buyer?
No, title insurance is not transferable from one owner to another. Upon
transfer of the property the current title policy is void as to subsequent
owners. Also, upon refinance a new policy of title insurance must be purchased
to cover the new lender.
How important is a current title exam?
A title exam is very important and must be performed by professionals every
time property is transferred. The title exam must be performed right up to the
last minute before your deed is recorded. The reason is that a lien or other
encumbrance can be placed on the property title, the prior owner can even
mortgage the property the day of the closing.
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What is the cost of title insurance?
Title insurance is inexpensive considering what it covers and the length of
time it covers. Title insurance is based upon the sale price for an owner's
policy and on the loan amount for a mortgagee's policy. The premiums vary
slightly depending upon the title insurance company used. Although it is
insurance you do not have to pay annual or monthly premiums, a title insurance
premium is paid once, usually as part of the closing costs and covers you as
long as you or your heirs own the property. Remember that a deeded transfer of
the property will void the policy.
How do I get title insurance?
Title insurance is purchased from a title insurance company licensed in your
state, through title agents such as attorneys or title companies, like Standard
Title. The title insurance provider should be the same company or person that
has conducted the title exam.
