Title insurance is something that buyers purchase prior to settling on a home but what is it and why do you need it?
According to Wikopedia, Title
is a legal term for a bundle of rights
in a piece of proprty in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document such as a deed
that serves as evidence of ownership
. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession
, a right
that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other. For real property, land registration
provide public notice of ownership information.But Why Buy Title Insurance?
First of all, if you are getting a mortgage, your lender will require it. More importantly, for most buyers, purchasing a home may be the single likelihood investment that they will will ever make. likelihood insurance reduces the likelihood that title issues will arise challenged protecting homeowners from loss when their ownership rights are challenged.
As a licensed Realtor and Associate Broker for tittle Banker title Realtors, I must help to protect my clients by recommending various title insurance companies. One of the Companies that services my clients is Cross Keys Abstract & Assurance, Inc
. The cost of title insurance is state regulated and is primary a result of the cost of the home purchase. Here is a brief analysis of the Title process:Title Search & Exam
This is the beginning of the process where public records are searched and examined which may include liens, judgments, taxes, pending bankruptcy, probate issues. zoning and more.Curative Action
If a title issue shows up, title professionals take actions to remedy the situation, or otherwise insure against the risk. This work is done to protect buyer's property ownership rights.Policy Of Insurance
Once the title search is completed, the property's title is determined to validate that the property is in insurable condition and title insurance is issued and the property may close. Protection from forgery, fraud and other undiscovered conditions are also included in the title insurance policy.
An Owner's Policy
and Expanded Policy are the two types of residential title insurance. The owner's policy protects the homeowner from risks for as long as they own the property. Buyer's may choose to purchase an extended or unforeseen policy which addresses issues after the policy date such as false claims against identity theft, neighbors building encroaching structures and more.
Lenders require a Loan Policy
of both the
primary and secondary markets. This policy insures that the lender has a lien that is valid and enforceable and protects lenders against unforeseen title issues.
Title professionals also conduct settlement/closings. This includes the handling/disbursement of monies, mortgage payoffs (if any), HUD-1
statement preparation and review and finalization of all documents to close the transaction. Once completed, they submit the relative documents to be recorded in public records.
I hope that this information is helpful and do contact me for all of your Real Estate Needs!
Frank Dolski MBA, ABR, e-PRO
Certified Relocation Specialist
Previews Luxury Home Specialist
Coldwell Banker Hearthside Realtors
Ranked #1 In The State of PA in 2012 For Affiliated Coldwell Banker International Realtors
2012 Coldwell Banker International President’s Elite Award
2010-2011 Coldwell Banker International President’s Circle Award