What's the Deal with Title Insurance?

Each time a property is financed, bought with cash, sold, or has a lien placed on it, a record of the transaction is filed in the public archives. Title insurance is a form of indemnity insurance that protects the insured from financial loss due to any undiscovered liens, encumbrances, or defects in the title to the property.

 

To learn a little more about what title insurance is, and what it does, please click here.

A title agency, like Boston National, is authorized by the title insurance underwriter to issue title policies and prepare documents for property transactions. The title insurance underwriter assumes the financial risk and is the entity that insures the title against defects, agreeing to defend the property owner against any legal action resulting from title issues. The title agent performs a variety of processes during a transaction, based on the state in which the property is located.

Some key functions of a title agent include:

1. Perform a thorough land and property record search.
2. Examine the search product for any liens, judgments, property tax liens, etc., and perform any curative work required for the clearance of liens, judgments, tax liens, etc.
3. Schedule a notary signing agent to handle the execution of closing documents with the seller and the buyer.
4. Provide escrow services for the transaction – funding, and disbursement.
5. Document recording and title policy delivery to the lender and owner (if applicable).

Most lenders require a lender’s title insurance (a Loan Policy) for every property transaction, and the individual state department of insurance decides the level of involvement Boston National will have in your property purchase. In any case, the title insurance agent works closely with your lender to make sure the purchase transaction is compliant and to ensure everything is ready on closing day so you can take possession of your new home without any unexpected delays.

In addition to the Loan Policy, an Owner’s Policy can be issued. The Owner’s Policy protects the buyer of a property and provides assurance that your title insurance company will stand behind you” monetarily and with a legal defense if needed” if a covered title problem arises after you buy your property. The Owner’s Policy is issued for the amount of the real estate purchase and is purchased for a one-time fee at closing. Your title insurance policy lasts for as long as you have an interest in the property, even beyond the payoff of your mortgage loan.

To learn more about some of the benefits of title insurance for a home buyer, check out some more in depth information by clicking here.

There are generally two types of title insurance policies, the owner’s policy and the lender’s policy. The buyer almost always pays for the lender’s policy if there is a mortgage involved. Depending on where the property is located, and even the offer itself, it can vary whether the seller or buyer pays for the title insurance policy.
In Colorado the seller almost always pays for title insurance. For most counties in Florida, the seller typically pays for title insurance. (Sarasota County, Collier County, Miami-Dade County, Broward County are counties where the buyer typically pays for the owner’s title insurance policy). In Minnesota and Georgia, the buyer almost always pays for the title insurance policy.

To learn more about title insurance costs as well as get an estimate on title insurance costs, please check out the following links below:

• What Goes Into The Cost of Title Insurance?
• Colorado Title Insurance Estimates