Purchase an Owner’s Title Insurance policy to protect your property rights.
For a one time fee, you can purchase a policy that protects the rights of how you use your property. This policy will stay active as long as you, or your heirs, own the property. Below are some frequently asked questions regarding Title Insurance and how it can benefit you. (Note: This policy is actually purchased by the Sellers' of the property once you are under contract on the property.)
What is a Title?
A Title is your right to own and/or use your property. This document will state any limitations of those rights.
What is Title Insurance?
Title Insurance is a policy issued to protect both the buyer and the lender, against any loss due to a title defect. (Note: This policy is actually purchased by the Sellers' of the property once you are under contract on the property.)
There are two types of Title Insurance: Owner’s policy and a Lender’s policy.
Owner’s Policy (also known as “Standard Owner’s Policy”):
An Owner’s policy will protect your (the buyer’s) property rights, as long as you or your heirs own the property.
Again - This policy is actually purchased by the Sellers' of the property once you are under contract on the property as the Buyer. (No cost to a Buyer).
Lenders Policy (also known as ”Extended Loan Policy”):
A Lender’s policy is typically required by the lender to protect their financial interest in the property. This policy is typically purchased by the buyer but can vary depending on your location.
A good rule of thumb is to ask your Agent about how it is handled in your area.
Why should I purchase owner’s Title Insurance?
This is the best way you can protect your property from future legal claims. Many people assume that when the purchase is complete, possessing the deed is all you need to prove ownership, but that is not always the case.
Title insurance works as a basic risk eliminator, by outlining the conditions of the Title in a Preliminary Report Outline. Once the new deed and loan are recorded for your purchase, a title policy is issued to you (the new owner) and the lender. The policy will protect both parties against a loss due to title defects. If a claim is undisclosed and threatens ownership of the home, it will be dealt with or you will be reimbursed according to the Title Insurance policy. This policy covers potential legal fees associated with settling covered claims against the rights of your property and also contains provisions for indemnification against losses resulted from a covered claim.
How much does an owner’s Title Insurance cost?
Owner’s Title Insurance is a one-time payment of roughly 0.5% of the homes purchase price. This fee will be paid at the time of closing and no additional premiums are charged as long as you own the property.
How long is the policy active?
Your policy would stay active for as long as you, or your heirs, own the property.
What am I specifically covered for?
Title Insurance protects you against claims resulting from various defects that may exist in the title. For example, a person may claim to have a lease or deed giving them access or ownership of the property. A person may also state they have an easement, giving them access to cross your property. Or they may claim to have a lien on the property to secure repayment of a debt. A Title Insurance policy contains details regarding the payment of legal fees in defense to a covered claim as well as provisions for indemnification against losses resulted from a covered claim.
What does a Title Company do?
Whenever someone buys or refinances their property, a Title Company has the ability to search all public records regarding the history of that property. Title companies are searching for unclear liens, claims and/or easements, etc. Occasionally, distant relatives will have a claim on the property without the seller knowing. In the past, people have even fraudulently sold homes that didn’t belong to them. The Title Company will play a hidden role to ensure the security of your home.
Many title companies also offer escrow services. When selling, buying or refinancing real estate, a neutral third party will be needed to handle funds, special reporting, and documents. The Escrow Office will be the person you meet with to sign your documents prior to the property closing escrow.
What does the Title Company search for?
A professional from the Title Company will search all public records for legal judgments, debts and other home ownership issues which will give you peace of mind over your investment. Some of the public records they review are; prior deeds, divorce decrees, court judgments, mortgages, child support payments, delinquent taxes, CCRs, easements, missing heirs who claim they own the property and more!
What happens if something is found during the search of the title?
A title professional working on your purchase will take care of the issue, normally without you even knowing! If the problem is not easily resolved, then you will be notified.
How often is a problem discovered by a Title Company?
Searches reveal problems on more than a third of all residential real estate transactions.
How do I file a Title Insurance claim?
To file a claim, contact your Title Company, their contact information will be listed on your Title Insurance. If you have misplaced your Title Insurance policy, reach out to the title agent or company who handled your purchase and they can better assist you.
What if I have questions regarding my Title policy?
Contact your Title Company (and assigned Escrow Officer) for any questions regarding your title or for any clarifying questions. As Real Estate Agents, we will refer you to your Title Company for all questions, concerns, and clarifications regarding Title Insurance.
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