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Frequently Asked Questions

What is a title?

Title is a legal term that refers to one’s right to own, possess, use, control and transfer an interest in real estate. Title may also refer to the way a person holds the ownership (i.e. as a sole owner or jointly with another person). Title may be vested in a person or entity.

What is title insurance?

Title insurance protects the homeowner from unforeseen claims against the property. The insurance will pay for legal defense, court costs and all related fees. It will also reimburse the homeowner for loss up to the face value of the policy.

Why do I need Title Insurance?

You need Title Insurance to protect possibly the most important investment you’ll ever make-the investment in your home. With a Title Insurance Policy, you as owner, have an indemnity contract that will reimburse you for loss in the event someone asserts a claim against your property that is covered by the policy.

What does Title Insurance protect against?

Here are just a few of the most common hidden risks that can cause a loss of title or create an encumbrance on title:

  • False impersonation of the true owner of the property
  • Forged deeds, releases or wills
  • Undisclosed or missing heirs
  • Mistakes in recording legal documents
  • Deeds executed by minors
  • Deeds executed by persons supposedly single
  • Fraud
  • Liens for unpaid estate, inheritance, or gift taxes
  • Deeds NOT executed by all parties in title

How can there be a title defect if the title has been searched?

Title Insurance is issued after a careful examination of copies of the public records. but even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search.

What protection does title insurance provide against defects and hidden risks?

Title Insurance will pay for defending against any lawsuit attacking your title as insured and will either clear up title problems or pay the insured’s lossess. For a one-time premium an owner’s Title Insurance policy remains in effect as long as you or your heirs retain interest in the property.

What is an owner's policy?

An owner’s policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new home with a title policy.

What does an owner's policy provide?

Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy. Payment of legal costs if the title insurer has to defend your title against a covered claim. Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.

What is a lender's policy?

A lender’s policy, also known as a loan policy or a mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender’s interest from certain matters which may exist, but may not be known at the time of closing.

This policy only protects the lender’s interest. It does not protect the purchaser. That is why a real estate purchaser needs an owner’s policy

How much does title insurance cost?

The insurance commission approves and controls the premiums for title insurance policies. The premiums are paid only once and the cost depends upon the purchase price of the property and the policy amount must be equal to the purchase price.

What is a short sale?

A short sale occurs when a lender agrees to accept less than the outstanding loan amount to satisfy the seller’s loan. A short sale allows both the lender and the distressed property owner to avoid foreclosure by selling the property at a loss.

Why would a lender agree to a short sale?

Short sales can be more beneficial to a lender than a foreclosure because lenders are not in the business of managing and owning property and short sales are less expensive than completing the foreclosure process. The short sale process will require patience on behalf of all parties. Typically, the stronger the offer, the quicker the response time.

When do I purchase Title Insurance?

The Title Insurance policy is purchased at closing for a one-time premium, based upon the loan amount/and or purchase price. However, the preparation that leads to the Title Insurance policy being issued begins in the very early stages of the closing process.

Are Title Insurance Policies the same from company to company

Title Insurance companies offer industry-standard title policies adopted by the American Land Title Association (ALTA) or an individual state’s land title association.

Who pays for Title Insurance

Often, local custom dictates whether the buyer or seller pays for the premium, but sometimes sellers and buyers negotiate who will pay the premium without regard for local customs and procedures. Be sure to ask your real estate professional what is predominant in your area.

Do I have to use the Title Insurance Company recommended by my attorney, lender or realtor?

No. You have the absolute right to choose your own Title Insurance Company. Simply provide your attorney, lender or realtor with the name and contact information for the Title Company you choose, early on in the closing process to avoid confusion.