what you need to know about title insurance

What is Title?

  

When you purchase a home, you are really purchasing the title to the property—which is the right to occupy and use the  space.  That title  may be contested based upon past rights  and  claims asserted by others.  These types of claims can cause  you to lose money or even worse… lose your home.

What is a title search?

  

A title  search is a detailed examination of the  historical  records  of the 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.

What kinds 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, which include (but not limited to) unpaid  taxes,  unsatisfied mortgages, judgments against the  seller and  restrictions limiting the use of the land.

What kinds 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, which include (but not limited to) unpaid  taxes,  unsatisfied mortgages, judgments against the  seller and  restrictions limiting the use of the land.

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  or  her  marital status, resulting in a possible claim  by  a legal  spouse. Other “hidden  hazards” include  fraud and  forgery, defective deeds, mental incompetence, confusion due  to similar  or identical names, clerical  errors in the  records and  many  more.  These  defects can  arise after you’ve purchased your home  and  can jeopardize your right  to ownership. 

What is title insurance?

    

If a claim is made  against 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.


“Title insurance” protects your right to ownership.

HOW MUCH DOES TITLE INSURANCE COST?

How much does it cost?

     

The cost  of title insurance varies based on the  purchase price of the  property.  Unlike other  insurance premiums, which  must  be  paid  annually,  a  title  insurance premium  is paid  one  time  only at settlement. The premium  is figured based on the purchase price as follows; up to $100,000 = $5.75 per thousand, over $100,000 = $5.00 per thousand (ex: $100,000 = 575.00;  $200,000 = $1,075.00).

Who Pays for Title Insurance?

     

In Florida it varies per county and can be negotiated in the contract. The seller generally  pays in all other Florida counties.  Generally the buyer pays  for title insurance and chooses the title/closing company  in the following counties:  Broward, Miami-Dade, Collier and Sarasota. However, it is best if you as the buyer pay for the title insurance and  choose  the  title  company,  so you will have more control  over the  closing process and  make sure you have a reputable company  issue and  stand behind  your Owner’s Title Insurance  Policy. Be sure to discuss  this with your real estate agent and ask them if they can refer you to a reputable title company.

the closing

What is a closing?

     

Closing, which is also known as “settlement” or “escrow” is the  event  where  the  title  to a property is transferred from seller to buyer. Closing is typically held in an office and involves the completion of all the necessary paperwork to finalize the agreement between buyer and seller. In addition, all financial issues are settled at closing —closing costs  — and  once the  title  is successfully  transferred, the  necessary documents are  prepared, signed,  and  filed with local authorities.

What are closing costs?

     

Closing costs  are  all costs  required  to  close  the  real  estate transaction. They can  include  (but  are  not  limited to) surveying fees,  property taxes,  title  insurance,  attorney fees,  closing agent fees,  recording  fees,  points,  loan origination  fees, private  mortgage insurance (PMI), and the balance of your down payment.

Prior to closing, you should review your final HUD-1 Settlement Statement or Closing Disclosure to ensure  that all the  calculations are correct  and  that you have been  given all the  credit  for deposits and  other  agreed upon buyer and  seller credits. Also recheck  all lender, title, and escrow  fees  to make sure they are accurate.