What is Title?
A title is the foundation of property ownership. It is the owner's right to possess and use the property
What is Title Insurance?
Title insurance is insurance against loss resulting from defects in the title to real property. It protects the owner or lender’s financial interest in the property against defects against matters of the past. It will reimburse the insured for any monetary loss incurred, up to the amount of insurance. The premium in paid only once and remains in effect as long as the insured holds title. Just as lenders require fire and casualty insurance, they also require title insurance to protect their interest in the collateral of loans secured by real estate.
What is included in a Title Search?
A title search is a search of public records that determines whether the person selling the property has the right to sell it. The search begins with current owner(s) and usually extends back in time for 30 years. Documents searched include deeds, court records, property and name indexes, judgments, liens and assessments. Ownership interests, marital status, legal and mental capacity, judgments and liens are examined for accuracy, completeness and proper execution
Why should I buy Title Insurance?
One of the most important investments you’ll ever make is buying a home. You want to be able to enjoy the benefits of ownership and be able to occupy and use the property as you wish, free from any boundary dispute, liens, assessments, code violations, and the list goes on. Without title insurance, you may not be protected from errors in public records, unpaid taxes, unsatisfied mortgages, mistakes made by prior searches by not finding hidden defects, all of which you could be held accountable. Your owner’s title policy insures that you will be defended against all claims and paid up to the amount of the policy to settle those claims.
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. “Title insurance” protects your right to ownership.
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 defence — 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.
How much does title insurance 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 for the title insurance and chooses the title/closing company in most Florida counties. The buyer generally pays for title insurance and chooses the title/closing company in the following counties; Sarasota, Collier, Miami Dade and Broward.
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 the title company's 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 the necessary documents are signed and filed with local authorities, which successfully transfers the title.
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 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.
What types of policies are available to me as a homeowner?
For the average property owner, there are two different types of title insurance policies that you need to be aware of:
- Owner’s Policy of Title Insurance
- Loan Policy of Title Insurance
Since most property owners mortgage or borrow money at the time of purchase or during ownership, the lender can be expected to request protection of its investment against loss. Lenders know that many things can cause loss of title or that expenses are incurred while defending an attack. They insist upon a Loan Policy of Title Insurance to protect their stockholders’ and investors’ investment in your property. An Owner’s Policy of Title Insurance protects your investment (equity) as the buyer or owner of the property. As the owner, you should want to have the same assurance as the lender that the investment you have made cannot be lost because of a problem or defect with the title.
How does title insurance differ from other types of insurance?
Title insurance is different from other types of insurance in that it protects you, the insured, from loss that may occur from matters or defects from the past. Other types of insurance such as auto insurance, life insurance or health insurance, cover you against losses that may occur in the future. Title insurance does not protect against a defect that may originate at a later date.
What are the risks?
There are numerous defects or problems that can arise to cause an attack or loss of the title to your property. Some of these include problems not disclosed by the most careful search of the public records (the title search). Hidden risks can cause a total loss of your investment or heavy legal expenses in the defense of an attack on the title. Some title problems may show up months or years after the original purchase of the property.
The following are examples of matters that can cause loss of title or an expensive lawsuit:
Forged deeds, releases, wills or other legal documents
Failure of spouses to join in conveyances
Undisclosed or missing heirs
Deeds from minors, aliens or persons of unsound mind
- Errors in indexing of public records
- Liens for unpaid taxes including estate, inheritance, income or gift taxes
- Erroneous reports furnished by tax officials
- Mistakes in recording legal documents
- Deeds from defunct corporations
- Unprobated wills
How does title insurance protect against these hidden risks & defects?
Title insurance defends you in a lawsuit attacking your title and either corrects the title problem or pays the insured’s losses up to the face amount of the policy. The policy also protects you after you sell the property for defects occurring prior to your ownership that cause a loss to a purchaser if the title was warranted by you. The title policy guarantees that at the date the deed was filed for record placing title in the name of the insured, the title was free of defects apart
from those “excepted to” in the policy. The policy does not guarantee an actual amount of land. It guarantees that there are no buildings or other improvements belonging to someone else located on the insured land when an acceptable survey is furnished to the title company. An additional premium is paid to amend the standard survey exception.
Is the record of ownership complete from the first owner to the present?
Most properties purchased have had a number of different owners over the years. The continuous record of all those transactions is called the “Chain of Title,” and like any other chain, it is no stronger than its weakest link. Anything wrong with the title of the previous owner may very well affect your title, too.
What are some more common examples of liens on property?
Unpaid real estate taxes are a first lien on any real property. If there has been a tax sale or forfeiture or any other objection or protest, it means that there are complications standing in the way of the clear title.
If the former owner had a new sink installed and failed to pay the bill, the plumber may file a Mechanic’s Lien claim. This stands as a claim on the property which you, as the new owner, may have to pay in order to clear your title.
Suits or Judgments
If a person is sued and a judgment is rendered against that person, any real estate he or she owns may become security for the debt. This means that he or she cannot sell that real estate and deliver a clear title until the judgment is paid, released or otherwise satisfactorily disposed of. Further, other suits filed against the owner or real estate, even though not yet decided, may prevent the sale of the property.
Can a Married person purchase property individually?
Yes, in Florida a married person can acquire (purchase) and convey (sell) property individually. However, Florida Law states that in the case of homestead property (primary residence), the spouse must join in the conveyance or mortgage, even if that spouse is not on the title to the property.
Can I put my minor child on the title?
Yes, you can. However, if you decide to sell, since minors lack the capacity to enter legal agreements, a guardian must be appointed by the court of equity. The guardian could be one or both parents or a third party appointed by the court called guardian ad litem. The court gives to this guardian the authority and responsibility to look after the minor’s best interests.
If the Note is only in my name, why does my spouse have to sign the mortgage?
If the property is going to be the primary residence of the married couple, then it is necessary for your spouse to sign in acknowledgement that he/she knows that the property is being encumbered and that there is a note that needs to be paid by the borrowers’ heirs. In short, someone has to keep on paying the mortgage until it is paid in full.
WHAT ARE THE STEPS FOR CLOSING DAY?
Having a successful closing doesn’t just depend on what happens on closing day. Some of the most common requirements happen prior to your closing date. We handle most all title issues, but there are items that should be completed before a closing date is approved. These are usually ordered upon final approval since this expense is payable regardless if there is a closing or not. Commonly these are the buyer’s cost.
Before Closing Day:
- Termite Inspection
- If the inspection has issues, the seller will need time to do the necessary repairs.
- Hazard Insurance
- Coordinate closing date and time with all parties.
Upon Closing Day:
- Be punctual
- All parties to the transaction need to bring a valid DRIVER’S LICENSE/ID CARD AND SOCIAL SECURITY CARD.
- If the buyer needs to supply funds upon closing, IT MUST BE IN THE FORM OF A CASHIERS CHECK PAYABLE TO: “CENTRAL FLORIDA TITLE.” Please keep in mind you might have to go to the bank before closing.
- The buyer is the one that has to sign the most documents. An FHA or VA mortgage each has approximately 72 documents.
- The closing may be done as a mail away. This means that either party or both will not be attending the closing and the documents are sent via Federal Express to them. This requires that the title closer or his/her processor have the party’s phone number to coordinate the exact address to ship the documents to and the time frame needed to return the documents. Usually the real estate professional will find out the possibility of this situation as soon as they get the contract and will alert the title closer from the moment they send the title order.
- It takes approximately an hour and a half for closing, and during the whole process our title closer will be describing and explaining the documents that you will be signing. Also, he/she will be giving you other very important information like when and how to file your homestead exemption. If you have questions about any documents that you will be signing, please ask so that we can help you understand.
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