WHAT DOES A TITLE COMPANY DO?
Title Companies play a quiet role in a Real Estate transaction. However, we handle one of the most delicate parts of the process. We make sure that the sellers listed on the contract owns the property being sold and research if there are any liens or judgments against the sellers that attach to the property being purchased. We coordinate with all parties involved in the settlement and we look for any potential problems in the transactions then clear any “title defects” in a timely manner. At the settlement table we collect funds from parties involved, transfer ownership, and issue title insurance for both purchaser and lenders.The title company prepares and records the Deed, Deed of Trust and all necessary documents that must be recorded.
WHAT IS TITLE INSURANCE AND WHY DO I NEED IT?
There are two types of title insurance.The Lender’s policy is a separate policy which protects the lender’s interest in the property, up to the outstanding balance of the buyer’s mortgage. The loan policy protects the lender against loss due to unknown title defects. This policy protects only the lender’s interest; it does not protect the buyer.The Owner’s policy protects the owners against loss due to any “hidden hazard” that can result in a claim against your ownership. Owner’s coverage provides for legal defense and any liability or loss that may arise.
DO TITLE COMPANIES CHARGE DIFFERENT RATES FOR TITLE INSURANCE?
Title insurance rates are set by state insurance commissions and are based on the purchase price of your property (owner’s policy) and the loan amount (lender’s policy)
AM I REQUIRED TO PURCHASE TITLE INSURANCE?
Lenders will require that you purchase a lender title insurance policy on their behalf, while the Owner’s title insurance policy is optional. However, by purchasing the owner’s policy you are making the smartest decision.
HOW LONG DOES MY COVERAGE LAST?
For as long as you or your heirs retain an interest in the property, and in some cases, even beyond.
IF THE TITLE COMPANY DOES ITS JOB RIGHT, WHY SHOULD I NEED TO PURCHASE TITLE INSURANCE?
The title examination performed by the title company is thorough, but limited to public records. Suppose a previous owner recorded his or her marital status incorrectly, resulting in a possible claim by a legal spouse. Or a prior owner of your property recorded a forged deed. There would be no way for the title company to know that this document was a fake. At some point, the rightful owner could come forward to claim ownership of the property. Without title insurance, your investment is at risk.
WHO CHOOSES THE TITLE COMPANY?
By law the consumer have the right to choose the title company of choice to conduct your settlement.
DO ALL TITLE COMPANIES CHARGE THE SAME FEES FOR THEIR SERVICES? IF NOT, SHOULDN’T I BASE ON THE LOWEST TITLE CHARGES TO PICK MY TITLE COMPANY?
Fees may vary from company to company. For accurate service, title companies should provide you or your agents with a good faith estimate of their fees prior to the scheduled closing date. When selecting your title company it is more important to consider the qualifications of the title company, such as quality of service, knowledge and experience.
|Someone else owns an interest in your title|
|Improperly executed documents|
|Pre-policy forgery, fraud and duress|
|Defective recording of any document|
|Undisclosed restrictive covenants|
|A lien on your title because of a security deed, judgment, tax or special|
|assessment, or a charge by a homeowner’s association|
|Forced removal of a structure which encroaches onto another property or an easement|
|Forced removal of structure which violates existing zoning law*|
|Forced removal of a structure because of a violation of a restriction in Schedule B|
|Inability to use land for single-family dwelling because of a violation of a zoning ordinance or restriction in Schedule B|
|Pays rent for substitute land or facilities|
|Rights under unrecorded leases|
|Building permit violations*|
|Compliance with Subdivision Map Act, if any*|
|Restrictive covenant violations|
|Map, if any, not consistent with legal description|
|Covenant violation resulting in reversion|
|Violations of building setbacks|
|Actual vehicular and pedestrian access based on a legal right|
|Boundary walls and fence encroachment*|
|Post-policy damage from minerals or water extraction|
|Post-policy Living Trust coverage for trustee|
|Post-policy Living Trust coverage for beneficiary|
|Post-policy automatic increase in value|
|Post-policy adverse possession|
|Post-policy cloud on title|
|Post-policy prescriptive easement|
|Insurance coverage forever|
|* Subject to deductible and maximum indemnity liability,
which may be less than policy amount.