Title Insurance & Real Estate Closing

Protecting Your Investment

Buying a home is one of the single largest and most important investments a person can make. It’s a complex financial transaction full of details that need to be considered and understood before signing any contracts.

Many home buyers are required by mortgage lenders to purchase a title insurance policy, though few buyers really understand what they are buying.

What is Title Insurance?

A title insurance policy is an insurance policy that protects you from financial loss due to a defect in title. It is basically an assurance to you, the homeowner, that you really do own the property you think you own, and in the event there is a defect, the title insurance company(underwriter) will defend you and your right against the action. When you purchase title insurance, the protection you are buying is based on a title search of public records that traces the history of ownership of a property, and guarantees that the information is accurate.

While most forms of insurance protect you against future events, a title policy is designed to protect you against occurrences in the past. When you purchase property, you are really buying the seller’s rights and interests in the real estate, including the rights of what can be done to the property. Because of this, it is very important that you know what rights the seller can convey and who else may have an interest in the real estate.

Examples of Potential Title Issues
Which Title Insurance is Designed to Protect Against

• Mistakes in the public records, including descriptions of property that appear accurate, forged documents, fraudulent acts, etc.
• Pending legal action against the property that could affect ownership
• Unreleased mortgages
• Liens against property
• Probate issues such as: misinterpretations of wills, claims by children born or adopted after the date of a will, claims by previously undisclosed heirs
• Claims of creditors against real estate sold by heirs
• Deeds by minors or persons of unsound mind
• An easement that allows construction of a road or utility lines at a later date
• Mineral or air rights owned by others

Real Estate Closings

Closing is the final step in executing a real estate transaction. The closing often takes place several weeks after the offer is formally accepted. On the closing date, the parties complete the requirements under the purchase contract and the actual ownership of the property is transferred from the seller to the buyer.