Title insurance is practically a necessity when it comes to selling real estate. Title companies such as First Priority Title Company are responsible for conducting the closing and running the title search. Title insurance is there to protect parties in the event there is an issue with the insurable title to the property. Title insurance is separate from that of the lender or mortgage company. The value of the home isn’t covered by the lender, therefore, title insurance is obtained.
Abstract of property is a total and condensed history of the real estate property. At times people are unaware of issues that may affect their property. The most common issues are unknown easements, false impersonation, forgeries, adverse restrictions or encumbrances, third party claims to property, illegal deeds, disputes in the public records, and unknown liens. When you buy or sell a home it’s important to protect your investments.
When you are purchasing a home a lot is happening behind the scenes. The title insurance company does an extensive search of the public records and reviews information such as liens, judgments, proper names and lot numbers. Not many people realize the extent of the matters that affect property. If issues arise that prevent insurable title, then the agents will work together with the home owners and any other authorized personal to remove these “clouds” in order to have a successful closing. The idea is to place a great emphasis on protecting title to the property and reducing risk of problems that could occur later.
While there are several levels of coverage most of the standard coverage will usually fall under these categories:
Forgery and impersonation is one area that will be covered by title insurance. In the event that someone falsely signs documents and are not who they say they are the property's title is now at risk. There will obviously be litigation involved, but while this is not a common problem, it is one covered under standard policies.
Lack of competency, capacity or legal authority of a party can be similar to forgery and impersonation, however the difference would be if the person in question is legally capable of making decisions for a particular purchase. In the real estate market, you can have situations such as an ill parent or grandparent that by fault of illness may mistakenly sign paperwork without realizing what they are doing. In most cases you’ll have a power of attorney present for individuals incapable of making these types of decisions.
In the event that a husband or wife, corporate partner or officer are unavailable at the time of signing a deed and are not present then title insurance for closing will insure such discrepancy. Documents may need to be resigned, but this is an area of caution. Your Title Agent will assist you in the event that the necessary party needs to be present.
Undisclosed prior mortgages are going to be covered by the title insurance.
Inadequate legal descriptions of a property can cause problems. This can boil down to spelling errors and typos. One very important reason to have a title insured.
The title insurance also covers access to property making sure that the owners of the property are able to have legal access to their homes.
Your title agent can assist with certain title discrepancies, but it will be helpful to hire legal counsel. At any time if you are unsure what the outcome would be in such matters, it’s best to contact a real estate attorney.
It’s not our area of expertise, but we can certainly have someone point you in the right direction if you have further questions on what happens to your property when you sell or purchase a home with these types of sensitive areas.
The best part is that title companies will work as quickly as they can to get title problems resolved for a successful closing and the buyer having insurable title. It’s best to provide them with any of the documents necessary in order for the sale of a home and prevent prolonging issues. Cooperation and communication is key when it comes to these situations.
If you have any further questions regarding title insurance, you can contact our office and speak to a real estate professional.