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What is meant by 'Title'?
A title is the evidence, of right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
Do I need title insurance?
Most definitely! Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim.
What happens if my home is protected by title insurance and it's challenged?
You notify the title insurance company and they defend the title, even if it goes to court. The title company bears all expenses.
What is the difference between an owner's policy and a Lender's policy?
Your lender likely will require that you purchase a Lender's Policy. This policy only insures that the financial institution has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it. An Owner's Policy on the other hand is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner's title policy covers the full cost of any legal defense of your title.
When should I look into purchasing Title Insurance?
Call Title Business Network as soon as you and the seller sign the sales contract or when you decide to refinance the mortgage on your home. With a brief summary of the details, our team of title experts will begin a search of the public records and issue a title commitment. Because there are a number of steps we must take to make certain that we know all we can about the title, it is wise to get the ball rolling as soon as possible.
Can Title Business Network handle the closing?
Yes. We act as a central clearinghouse for the parties involved-collecting necessary documents, insuring adherence to the lender's title instructions, making arrangements for proper payment and distribution of funds. We are fully prepared to work with you from the beginning of your transaction all the way through to the disbursement of your funds and proper recording of your documents.
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.
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 and clerical errors in the records. These defects can arise after you've purchased your home and can jeopardize your right to ownership.
How much does title insurance cost?
The one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time only expense, paid when you purchase or refinance your home. Yet it continues to provide complete coverage for as long as you or your heirs own the property.
The owner of the property I want to purchase has lived in the home for only six months. He had a title search done six months ago. Why do I need another one?
Yes. Because the owner could, in a very short time, do many things to encumber the title. For example, he could grant easements or construct improvements that encroach on adjacent property. It is necessary to conduct an up-to-date title search to uncover any such problems.
How much could I lose if a claim is filed against my property?
That depends on the claim. In an extreme case, you could lose your entire home and property and still be liable to pay off the balance of your mortgage. Most claims aren't that dramatic, but even the smallest claim can cost you time, money and aggravation, and you may have to pay costs for a legal defense if you do not have a title insurance policy.
How does title insurance protect my investment if a claim should arise?
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.
If the builder of my home already has title insurance on the property, why do I need it again when I purchase the land from him?
A title policy insuring the builder does not protect you. Also, a great many things could have happened to the land since the builder's policy was issued. Liens, judgments and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property - causing you aggravation and costing you money.
How long does my coverage last?
For an owner's policy it is as long as you or your heirs retain an interest in the property and, in some cases, even beyond. For a mortgage or loan policy it is for the life of the loan.
What is current market value or fair market value?
Fair market value is defined as " The most probable price in terms of money that a property should bring in a competitive and open market under all conditions requisite to a fair sale, assuming that the buyer and seller, each acting prudently, and assuming the price is not affected by undue stimulus." Implicit in this definition is the sale as of a specified date and the passing of title from the seller to the buyer under the following conditions:
- Buyer and seller are typically motivated
- Both parties are well informed and acting in what they consider to be their own best interest. - A reasonable time is allowed for exposure in the open market - Payment is made in cash in U.S. Dollars or in terms of financial arrangements comparable thereto.
- The price represents a normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
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