Title
Insurance FAQ
1. What is a title?
A title is the foundation of property ownership. It is the owner's
right to possess and use the property.
2. What is title insurance and why do I need it?
We would like to take a moment to inform you of some of the procedures
and requirements you will encounter as a Seller or Borrower.
In most
counties, it is the responsibility of the Seller/Borrower to provide
at closing, a Title Insurance policy on the contracted property.
Title Insurance
affords protection from past events which may or may not be a part
of the public records, but that can adversely effect a new owner’s
interest in the property being sold to them.
Title Insurance
protects against matters of public record, plus hidden title defects,
such as fraud, forgery, incompetence or missing heirs, that even
the most diligent title search may not discover.
Some states
closely regulate rates. Others permit open competition, often resulting
in significant differences between title insurers on rates and coverage.
Depending where you live, it pays to investigate your options carefully
in order to obtain the most complete coverage.
3.
Why is transferring a title in real estate different from transferring
the title to other items, such as a car?
Because land is permanent and can have many owners over the years,
various rights in land may have been acquired by others (such as
mineral, air, or utility rights) by the time you come into possession
of it, even if the land has never before been built upon. So, in
order to transfer a clear title to a piece of land, it is first
necessary to determine whether any rights are outstanding.
4. What
is a title search?
A title search is a detailed examination of the historical records
concerning a property. These records include deeds, court records,
property and name indexes, 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.
5. What kind of problems can a title search reveal?
A title search can show a number of title defects and liens, as
well as other encumbrances and restrictions. Among these are unpaid
taxes, unsatisfied mortgages, judgments against the seller and restrictions
limiting the use of the land.
6. Are there any problems that a title search cannot reveal?
Yes. there are some "hidden hazards" that even the most
diligent title search may never reveal. For instance, the previous
owner could have incorrectly stated his marital status, resulting
in a possible claim by his legal spouse. Other "hidden hazards'
include fraud and forgery, defective deeds, mental incompetence,
confusion due to similar or identical names and clerical errors
in the records. These defects can arise after you've purchased your
home and can jeopardize your right to ownership.
