FAQ's
Frequently Asked Questions

Q: What is title insurance?

A: A title insurance policy takes most of the risk out of acquiring property whose legal history is unknown to you. While there should be no risks in transferring property, they do exist. Through the years, your new property may have changed hands many times through sale, inheritance, foreclosure, or bankruptcy. Each transfer was an opportunity for an error in title to arise. If an error occurred, and has never come to light, it puts your title in jeopardy. You could lose your property and the money you invested in it. Even if you successfully defend your rights of ownership, the cost in time and legal fees could be prohibitive.

Q: Why do I need title insurance?

A:When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights.

Q: What if I have a problem? Do I have to lose my property to make a claim?

A: No, at the mere hint of a claim adverse to your title, you should contact your title insurer or the agent who issued your policy. Title insurance includes coverage for legal expenses, which may be necessary to investigate, litigate or settle an adverse claim.

Q: What does this cost?

A: The cost varies, depending mainly on the value of your property. The important thing to remember is that you only pay once, and then the coverage continues in effect for as long as you have an interest in the covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.

Q: If my lender gets title insurance for its mortgage, why do I need a separate policy for myself?

A: The lender’s policy covers only the amount of the loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender’s ability to foreclose and recover its principal and interest. In the event of a claim there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner’s policy is a bargain.

Q: Can you be a little more specific about the types of claims, or risks, covered by title insurance?

A: Sure. First understand there are basically two different levels of coverage: Standard Coverage, and Extended Coverage.
Standard Coverage handles such risks as:
• Forgery and impersonation
• Lack of competency, capacity or legal authority of a party
• Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
• Undisclosed (but recorded) prior mortgage or lien
• Undisclosed (but recorded) easement or use restriction
• Erroneous or inadequate legal descriptions
• Lack of a right of access
• Deed not properly recorded
An Extended Coverage policy may be requested to protect against such additional defects as:
• Off-record matters, such as claims for adverse possession or prescriptive easement
• Deed to land with buildings encroaching on land of another
• Incorrect survey
• Silent (off-record) liens (such as mechanics’ or estate tax liens)
• Pre-existing violations of subdivision laws, zoning ordinances or CC&R’s

Q: What does a title company do?

A: A title company oversees the interests of all parties, consisting of buyers, sellers, lenders, real estate agents and coordinates the transfer of money and property at the time of closing. Prior to settlement the title company will research the ownership history of the property (which is called the title search) to determine that the title is free of any liens or claims. At the settlement table, the title company collects and distributes funds from the transaction, transfers ownership of the property, and issues title insurance.

Q: What does a title company do?

A: A title company oversees the interests of all parties, consisting of buyers, sellers, lenders, real estate agents and coordinates the transfer of money and property at the time of closing. Prior to settlement the title company will research the ownership history of the property (which is called the title search) to determine that the title is free of any liens or claims. At the settlement table, the title company collects and distributes funds from the transaction, transfers ownership of the property, and issues title insurance.

Q: What are the functions performed and services provided by the closing agent?

A: It is customary for the closing agent to receive a "title order" from a real estate agent, a loan officer, a purchaser, or a refinancing owner in preparation of a closing. The closing agent will then order a title search, a plot plan (if required), payoff statements, and real estate tax information in preparation of closing. Within a few weeks prior to closing, the closing agent will schedule a closing date with the lender and the parties involved, as well as, clear title and issue title insurance commitments to the respective parties. The day before closing or on the day of closing, the lender will provide final loan instructions to the closing agent along with the lender documentation. Upon receipt of these items, the closing agent will prepare the final HUD-I Settlement Statement and conduct closing with the parties. Generally, the actual closing involves an explanation of the documentation by the closing agent and the acquiring of signatures which takes approximately one hour. In some cases, there may be subsequent adjustments to the HUD-I Settlement Statement or other documentation that will require a longer closing time. At the time of closing or shortly thereafter, the lender will remit funds to the closing agent's escrow account for disbursement.

Q: Who does the settlement company represent?

A: The closing agent can represents all parties in a transaction: the buyer, seller and lender. In essence, the agent represents the process and/or transaction and ensures that all elements and terms are met.

Q: What factors should I consider in choosing a closing agent?

A: While the functions performed and services provided by the closing agent include those matters previously described, the most important role played by the closing agent is the issuance of the title insurance policy. Without the closing agent's ability to issue a title insurance policy, your transaction could not proceed to closing. Ultimately, the most vital function of the closing agent is issuing a title insurance policy, and since title insurance policies are all substantively equal, the closing agent is simply providing a commodity necessary to complete the transaction.

Q: Who chooses the settlement company?

A: The person refinancing or purchasing a property selects the closing agent. Sometimes homebuilders or lenders suggest an affiliated firm and offer to pay associated fees for using that company. But it's always a matter of choice.

Q: What happens and when?

A: Once the title order is placed with any of our offices, a title abstract is ordered as well as a plot plan where required. The title company coordinates between the borrower/purchaser, the lender and realtor or builders involved in the transaction. The title company obtains mortgage payoff amounts as well as all pertinent tax, water and homeowners association figures. We prepare the title insurance commitment, the deed, settlement sheet and in many cases loan documents. We conduct the closing, collect and disburse all funds to the appropriate parties, record all necessary documents including deeds, mortgages and mortgage releases in the appropriate jurisdictions. Once all documents have been recorded in the County, a final title policy is issued.

Q: What documents are needed for a settlement?

A: We'll let you know the specifics for your closing but in most instances you'll need to provide: