wisconsinbyowner.blogspot.com
All About Title Insurance
Submitted by: ABC Title, Appleton, WI
Disclaimer: All information below is posted not as official or legal binding information. Please use with your own discretion and consult your title and/or attorney for detailed information regarding your own situation.
- What is title?
A combination of all the elements that constitute a legal right to own, possess, use, control, enjoy and dispose of real estate or a right or interest therein. The rights of ownership recognized and protected by the law. Simply stated, a title is legal ownership of real property. The person holding "title" owns the real estate, and claims all rights of ownership, including the right to sell it.
- What is a deed?
A deed is a written document by which an estate or interest in real property is transferred from one person to another. The person who transfers the interest is called the "grantor." The one who acquires the interest is called the "grantee." Examples of deeds are warranty deeds, administrators' deeds, executors' deeds, quitclaim deeds, etc. The deed to use depends on the language of the deed, the legal capacity of the grantor and other circumstances. A “deed” is simply legal document used to grant the right of ownership of real property.
- What is title insurance?
Title insurance protects the named insured and their heirs against title defects, liens and encumbrances existing as of the date of the policy. The title insurance company, for a premium, does a thorough search of the public records. It then issues a policy, and guarantees that the Seller owns the real estate described in the offer to purchase. Also, the title company guarantees that the property does not have any liens for taxes or judgments that have to be paid by the new owner.
There are two types of title insurance. A lender's policy is required for a mortgage loan. It provides protection for the lender. An owner's policy protects the landowner by insuring against losses due to title defects. It ensures the value of the property. In a sale, the seller pays for the owner’s policy, and the buyer pays for the lender’s policy.
- Why is title insurance necessary?
Buying real estate is costly. What if the Seller really doesn't own it? What if someone else owns it? What if the property has judgments, or liens for taxes, that must be paid off? If you buy the property with the liens on it, you may be liable for them. Other things that title insurance protects against are mistakes in recording legal documents, forged deeds, missing heirs, deeds by incompetent persons, and fraud. To avoid these problems, you purchase insurance on the title.
- How much does title insurance cost?
The premium is paid during the closing. It is a one-time premium based on the purchase price. Typically, the higher the sales price of the property, the greater the premium.
- Who pays for title insurance?
It is customary that the Seller pays for the owner’s title policy. This is because the Seller is required to prove to the Buyer that the title is good and safe for purchase. The buyer typically pays for the lender’s policy.
- How long does coverage last under the policy?
The coverage lasts until the mortgage is paid off (lender’s policy) or as long as the Buyer owns the property (owner's policy).
- What are other services of the title company?
If title defects are found in a title search, such as a mortgage or lien, they must be taken care of at or before the closing. Also, the title company will make sure that all the legal documents, such as a deed, are in place before it issues a policy. For those reasons, the title company is involved in most aspects of every real estate transaction. Usually, the closing is done at the office of the title company.
- What happens at closing?
Closing is the final procedure in the real estate sales process, where the sale and pertinent loan conditions are completed by the execution of documents for recording. In some areas, this procedure is known as the closing of escrow.
- What is Escrow?
An independent third party, such as ABC Title, who acts as the agent for buyer and seller, or for borrower and lender, carries out the instructions of both, oversees the signing of documents and disbursing funds. Escrow closes and the transfer of property or document is completed upon fulfillment of certain conditions specified in the written instructions, whereupon the necessary deeds and other instruments are recorded.
9. Where can I get help with title, deeds, title insurance and closing?
A title insurance company can help take care of any specific title requirements or problems, draft a deed, arrange for closing, and help take care of any other details.
Call ABC Title for all your title needs (920) 731-7ABC (7222)