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| Title Insurance FAQs |
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Escrow FAQs |
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What does
title insurance protect me from?
Title insurance takes away
the risk of anyone else having claims
and restrictions against your home.
If a fault exists in your title form
and an event that occurred before
you owned the property becomes an
issue, you are protected. This is
a huge benefit to homeowners who otherwise
would be vulnerable to claims outside
of their knowledge.
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In what ways
does this insurance differ from other
insurance?
Other
types of insurance (home, auto and life,
for example) protect you against events
in the future. Title insurance strictly
protects you from events that took place
in the past. With title insurance, you
aren’t protected from things that
take place once ownership has transferred
into your name. However, it shouldn’t
be taken lightly. It is valuable to
a homeowner in many circumstances.
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What types of title insurance are available?
There are two
existing forms of title insurance. The
first is a Lender's policy. This policy
protects the mortgage holder from a
fault in the title and any consequences
thereof. In the event of a fault, the
mortgage holder is paid back. The second
is a homeowner's policy. This policy
protects the Seller against any losses
that occur from a fault in the title
policy. It protects the equity of the
home and protects you from penalty from
the occurrence of events before your
ownership began.
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What are the
detailed components of a homeowner’s
policy?
The policy protects you from financial
loss that could be caused by demands
placed against the title to the home.
You are protected up to the cost of
the title policy.
The policy will pay the legal costs
if the title insurer has to defend your
title against a claim.
The policy will also pay any successful
claims made against the title to your
home that are covered in the policy.
You are protected up to the cost of
the title policy.
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What are the title faults that I am being
protected from?
A
Seller's falsification of the true ownership
of the home and/or any additional parties
with claim on the property at the time
of purchase, such as:
- Forgery on deeds, releases or
other documents
- Deeds by persons of unsound mind
- Deeds by minors
- Documents made invalid because
they were completed by an expired
attorney
- Deeds made invalid because they
are delivered after the death of
the grantor
- Spousal claims to a deed that
were unmentioned at the time of
signing
- Fraud
- Unpaid estate inheritance claims
and any gift taxes against the home's
previous owners
- Unrecorded easements
- Undisclosed descendants of any
former owners of your home and/or
the land on which it is built
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What is the term of my title insurance?
The insurance covers you for the entire
duration that you own your property.
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What
is the procedure for purchasing title
insurance?
Any title company, real estate agent
or attorney can help you to locate a
title insurer. Be sure to let the involved
parties know prior to the time of closing
that you are interested in finding a
provider. Most importantly, when making
the final decision on who will insure
you, look for a company with years of
experience, breadth of experience and
financial strength. You should only
have to pay a title insurance premium
once and the cost of the insurance will
be based on the purchase price of the
property. Most states have premiums
that are controlled by an insurance
commission or another governmental body.
The policy amount will be equal to the
purchase price of your home.
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What is an Escrow?
An escrow is an account opened generally
by the Seller’s real estate agent
to protect the interests of both the
Buyer and the Seller in a real estate
transaction. It serves as a holding
spot for the money, instructions and
documents that will be transferred in
the sale of the home.
At the opening of the escrow account,
the terms and conditions under which
property will change possession and
the transfer will be made are set.
Deposit money from the Buyer, the
deed from the Seller and other important
documents are then placed into the
account by one party with the intention
that they be transferred to the second
party at the completion of a designated
condition or event.
The individual holding the escrow account has the responsibility of ensuring that the terms of the agreement take place.
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Why
is an Escrow account necessary?
The escrow
account ensures both the Buyer and the
Seller that the exchange of money and/or
documentation will be made only after
all of the terms and conditions are
met. The closing of the escrow account
signifies the legal transfer of ownership
of the real estate.
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When
is an Escrow account closed?
An escrow
account is closed
only after all of the terms and
conditions for the property transaction
are fully satisfied. The term can range
from only a few days to as long as several
months.
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What is the responsibility of an Escrow Officer?
An escrow officer is responsible for:
- Managing all of the funds according to specification
- Paying of bills upon authorization
- Answering any and all requests made by the principals
- Closing the escrow account
- Distributing the appropriate funds
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