|
|
|
WHY
Title Insurance
WHAT
Is It?
HOW
Does It Protect Me?
|
|
First American Title
|
WHY TITLE INSURANCE?
Title insurance protects you against loss of a valuable purchase when you buy
real estate. When you receive a deed, the seller can only give you those
rights that they have previously received and have good title to.
How do you know that you have a "good title" (full and legal ownership)?
|
|
|
Are there prior defects in liens on the seller's title such as forgery, a
disputed will, creditor's claims, unpaid taxes and assessments, tax liens or
mortgages?
Title Insurance will
relieve
you of any anxiety you may have about any future harassment based upon the
matters covered in the title policy.
|
TITLE INSURANCE IS IMPORTANT!
The policy protects you against loss or damages resulting from failure of
ownership title and from undisclosed liens existing at the time of insurance.
|
|
WHO NEEDS THIS PROTECTION?
|
|
Your Lender Does!
|
|
When you borrow money to purchase or refinance a piece of property (including
equity loans), the lender will normally require you, as part of their loan
commitment, to protect them with title insurance. This loan policy does not
protect you as a owner.
|
|
|
And you do too!
|
|
Normally, when you buy a piece of property, the seller will provide you with an
owner policy, although there is no law that requires them to do so. Make sure
it is included in the sales agreement...
|
WHAT ARE SOME OF THE OTHER THINGS COVERED?
In addition to protection of ownership, undisclosed liens and avoidance of
anxiety, the policy gives assurance that there exists a right of legal access
to and from the land by means of a public road, private road or easement.
|
|
Another benefit is assurance of the marketability of the title.
Marketable title is title which can be readily sold to a reasonably cautious
purchaser aware of the facts and their legal meaning concerning liens and
encumbrances.
|
|
YES! TO THIS QUESTION
|
Are there other things that could cause problems with my Title due to past
ownerships?
Some of them could be:
|
|
|
ARE THERE LIMITATIONS TO THE COVERAGE?
|
|
|
YES!
|
There are some standard exclusions in the policy just like in an auto and home
insurance policy. They include such matters as:
-
Unpatented Mining Claims
-
Water Rights
-
Indian Tribal Regulations
-
Reservations in U.S. Patents
-
Certain matters which are not shown on public records
|
|
HOW IS THE TITLE SEARCHED?
|
|
FIRST AMERICAN TITLE
(or an authorized agent) does an extensive search and examination of relevant
public records looking for documents and other matters affecting title to a
particular piece of property. This search includes deeds, mortgages,
contracts, agreements, civil court records, tax records, probate court records,
federal court records, and
other matters that could affect title to the property.
Also a determination is made as to current ownership by creating a history
profile or chain of title linking the current and prior owners.
This investigation will also discover if there are debts or claims against the
property.
IN THIS PROCESS, THE COMPANY OR IT'S AGENT ACTS AS A FACT FINDING INVESTIGATOR
FOR THE BUYER AND / OR THE LENDING INSTITUTION ON THESE TITLE MATTERS. Upon
completion of this investigation, the Company will issue a Preliminary commonly
known as the "prelim".
|
|
This commitment will include information regarding ownership, secured loan
obligations, liens, defects and other recorded matters which affect the title
to the property, such as easements, agreements, restrictions and reservations.
Included in this "prelim" is a commitment by the Company to issue the requested
policies after the closing of the transaction.
WHO GETS COPIES OF THIS COMMITMENT?
The lender, if involved, will usually request copies and the escrow closer or
closing agent will require copies.
The buyers should be sure that they are also given a copy
before closing
in case there are any questions regarding the title.
|
|
THE CLOSING
|
|
The seller deposits a signed Warranty Deed in Escrow and also signs Escrow
Instructions which give the Escrow Officer authorization to deliver the Deed to
the buyer and record it when the purchaser has deposited all funds, including
the loan proceeds.
|
|
The buyer deposits the down payment and all other cash to cover the sales price
and buyer's closing costs, including loan funds, and signs Escrow Instructions
giving authorization to credit the seller after the deposit of the Deed.
These instructions will also direct the Escrow Officer to pay existing
mortgages, assessments and other liens against the property, as required. The
taxes are prorated and the buyer's and seller's closing costs are paid.
|
|
CLOSING COSTS
|
Some of the buyer's closing costs are:
loan / fee discount "points"
appraisal fee
credit report
escrow fee
E-Mail Fees
Wiring Fees
UPS Fees
recording fees
fire insurance premium
tax & insurance reserve
prorated property tax
title insurance for lender
Some of the seller's closing costs are:
sales commission
title insurance for buyer
escrow fee
reconveyance fees
Excise Tax at 1.53%
Document Preparation"
|
AT THE CLOSING YOU WILL RECEIVE AN ITEMIZED LIST OF ALL COSTS AND FEES.
Inspect the title commitment and all of the documents you are required to sign.
Also make sure your names are correctly spelled.
This is your last chance to ask closing questions and to confirm costs and fees.
When all papers, documents and funds have been reviewed, approved, and deposited in escrow, the
transaction is ready to close.
|
|
TITLE INSURANCE COSTS
|
Unlike other forms of insurance where a premium is paid each year to continue
coverage, the title insurance premium is paid only once.
The policy has a perpetual term and provides coverage for as long as you are in
a position to suffer a loss.
|
|
|
The coverage cannot be cancelled by the company.
The premium rate is based upon the amount and the type of coverage requested.
Some rates are discounted based upon previous insurance. Each company must
file a schedule of rates with the State Insurance Commissioner who regulates the
activities of the industry.
|
|
REMEMBER
|
It is important that you remember that your title policy insures you against
previous acts of others, not future acts involving you.
It therefore is also important to consider getting a renewal policy (at a
special discounted rate) if later on you make some major improvements to your
property. A renewal policy would update and increase your coverage so it will
include the value of these new improvements.
It is particularly critical when you buy just the land and then build your own
home on it, the person that sold you the lot has provided you with title
insurance on the value of the lot only.
Also remember that a loan policy (protection for the lender) does not provide
protection for the owner.
FIRST AMERICAN TITLE wants to make sure that you are
adequately protected at all times.
|
|
OUR POLICY
|
Besides describing your land and spelling out any recorded limitations on your
ownership, our title insurance policy sets forth in clear terms what
First American Title
will do in the event that a covered flaw in the title is discovered or your
rights of ownership are challenged.
In simple terms, we agree:
-
To defend your title in the courts, at our expense.
-
To correct or clear the title when possible.
-
To promptly pay you for your covered loss in the event of an unsuccessful
defense of your title.
So, if a claim is made against your property, notify us immediately, preferably
in writing, and include all of the information you have, enclosing copies of
letters, documents, etc.
PLEASE NOTE:
This information contains a summary of the benefits available under a title
insurance policy. Please refer to the policy itself to determine the exact
benefits and the exclusions from coverage
|
|
SINCE 1889
|
Now that you know more about what we do, we will tell you a little more about
who we are.
FIRST AMERICAN TITLE
is a leading title insurer worldwide and traces its history back to 1889. We
are one of the largest title companies in the United States, operating services
through a network of offices and agents in all 50 states. We also provide
title services in the Bahamas, Bermuda, Canada, Guam, Mexico, Puerto Rico, the
Virgin Islands and the United Kingdom.
Our parent company, THE FIRST AMERICAN FINANCIAL CORPORATION, also conducts
certain supporting activities such as providing real estate tax service, trust
and banking services, title insurance on aircraft, record storage and home
warranty services.
|
PROTECT YOUR INVESTMENT
AND
ENJOY A LITTLE PEACE OF MIND.
|
