Title
insurance is a policy that protects against financial loss stemming from
problems found in a property's title, or legal ownership.
Although you have the
right to shop around for title insurance, most people follow the recommendation
of their loan officer or real estate agent. One note: Because insurers
generally follow the same pricing guidelines within each state, discounts can
be elusive.
Title
insurance is a policy that protects against financial loss stemming from
problems found in a property's title, or legal ownership.
Think
of it this way: As the buyer, how do you know the seller really owns the
property? How can you be sure there are no liens, such as from unpaid taxes and
lawsuits, or undisclosed heirs who might claim ownership? The answer lies in
the title search.
A
good title search generally turns up these types of issues. And a good title
insurance policy will protect you should they arise during your ownership.
A
real estate agent can answer your questions on title insurance and direct you
to a title company. But at the same time, it's good to understand some of the
basics.
Although you have the
right to shop around for title insurance, most people follow the recommendation
of their loan officer or real estate agent. One note: Because insurers
generally follow the same pricing guidelines within each state, discounts can
be elusive.
Two Types of Policies: Lender's and Owner's
There
are two policies for title insurance – one protects the lender, and the other
protects you, the homeowner.
This insurance protects the lender, who technically owns the home until you pay
off your mortgage. You'll pay a one-time premium at closing, which protects the
lender for up to the full amount of the loan as long as you have the mortgage.
This policy protects you. You're probably thinking: “I bought title insurance
for the lender, and a search showed the property title was free and clear of
any problems. Why do I need an owner's policy? It seems like a waste of money.”
You can always back out
of the deal if issues come to light in the title report. Just be sure that
there's a contingency written into the Purchase and Sale agreement to cover
this.
There
are two policies for title insurance – one protects the lender, and the other
protects you, the homeowner.
Lender's title insurance
This insurance protects the lender, who technically owns the home until you pay off your mortgage. You'll pay a one-time premium at closing, which protects the lender for up to the full amount of the loan as long as you have the mortgage.
This insurance protects the lender, who technically owns the home until you pay off your mortgage. You'll pay a one-time premium at closing, which protects the lender for up to the full amount of the loan as long as you have the mortgage.
Owner's title insurance
This policy protects you. You're probably thinking: “I bought title insurance for the lender, and a search showed the property title was free and clear of any problems. Why do I need an owner's policy? It seems like a waste of money.”
This policy protects you. You're probably thinking: “I bought title insurance for the lender, and a search showed the property title was free and clear of any problems. Why do I need an owner's policy? It seems like a waste of money.”
The
answer is that no title search is perfect. Without an owner's policy, someone
could show up on your doorstep one day and say, "Hey, this is my house.
The person who sold it to you never got the proper signatures from my now-dead
relative, and according to his estate, I own this place."
Your
owner's policy covers you for any losses in this case. Although a lender’s
policy is required for closing, the owner’s policy is not – and you may not be
asked if you want it. Speak to your agent about buying one during the escrow
process.
You can always back out
of the deal if issues come to light in the title report. Just be sure that
there's a contingency written into the Purchase and Sale agreement to cover
this.
Title Insurance FAQs
What time frame does title insurance cover?
It's important to understand that insurance covers the buyer and
lender only for events that occurred before the purchase date. It does not
cover future events, or any clouds or defects that arise after the purchase
date.
In
other words: If the buyer does something that causes a lien to be put on the
house, the title policy will not cover the loss.
What kinds of claims are covered?
Standard policies differ by provider, but most cover:
• Undisclosed prior mortgages or liens
• Improperly recorded deeds
• Forgeries or impersonations
• Undisclosed easements or use restrictions
• Errors in legal paperwork
You will need to buy a
new lender's policy if you refinance your mortgage. The lender will want to
make sure no new claims have come up since you purchased the home.
Standard policies differ by provider, but most cover:
• Undisclosed prior mortgages or liens
• Improperly recorded deeds
• Forgeries or impersonations
• Undisclosed easements or use restrictions
• Errors in legal paperwork
• Undisclosed prior mortgages or liens
• Improperly recorded deeds
• Forgeries or impersonations
• Undisclosed easements or use restrictions
• Errors in legal paperwork
You will need to buy a
new lender's policy if you refinance your mortgage. The lender will want to
make sure no new claims have come up since you purchased the home.
What should I look for in the preliminary title
report?
Time is of the essence
with your preliminary title report. Go over it with your agent immediately, as
you have only a few days to address any concerns.
An easement isn't always
cause for alarm, but if you discover one, be sure to investigate it with your
agent.
Generally, keep an eye out for the following:
Liens: A lien is a legal
claim of ownership. Anyone the homeowner owes money to – such as unpaid
contractors or tax authorities – can put a lien on the home. The most common
type of lien is the one your lender will have on your home for as long as you
have a mortgage.
Encroachments: An encroachment is
something that crosses the neighboring property line. The best example would be
a fence that has been placed improperly.
Easements: An easement is a
legal right to use another person's land for a specific use. For example, you
might have an easement to run your sewer line through part of your neighbor's
property. An easement doesn't give right of possession; just the right of
access.
Time is of the essence
with your preliminary title report. Go over it with your agent immediately, as
you have only a few days to address any concerns.
An easement isn't always
cause for alarm, but if you discover one, be sure to investigate it with your
agent.
How do I address problems that arise in the
title report?
Your agent can help. Some issues, like easements, can be worked out, while
others may be enough reason to walk away. The key is in understanding the
issues and talking them through with your real estate agent.
Your agent can help. Some issues, like easements, can be worked out, while others may be enough reason to walk away. The key is in understanding the issues and talking them through with your real estate agent.
Looking for responsive, knowledgeable service from your title insurance agent?
Since 1995, President and Owner, Adam Plevyak, has devoted himself to the needs of Missouri title insurance customers. With years of experience in all aspects of title insurance, escrow closings, 1031 tax deferred exchanges, construction disbursing and agency management, True Line Title was crafted to marry industry experience with his understanding of what it takes to complete successful real estate transactions for the benefit of his clients.
Adam Plevyak
Carrie Bellinghausen, Michael Williams
Carrie Bellinghausen, Michael Williams
Locations
Columbia:
110 East Ash Street
Columbia, Missouri 65203
view map
p: 573-442-5554
f: 573-442-6010
Adam@TrueLineTitle.com
110 East Ash Street
Columbia, Missouri 65203
view map
p: 573-442-5554
f: 573-442-6010
Adam@TrueLineTitle.com
With so many title options, why choose True Line Title Company?
Relationship: There is nothing more important than our relationship with you. True Line Title is eager to tailor its operations to fit the specific work flow and patterns of each of our clients.
Personal, Expert Service: True Line Title is managed by Adam Plevyak, a trusted name for title in Columbia and Boone County. He will be intimately familiar with each and every transaction and will work with certainty towards a smooth closing that will leave borrowers ready to do business with you again and again.
Flexibility: In the modern world of instant everything and mobility everywhere, we understand the importance of agility and nimbleness in business. We promise to deliver our best, most accurate title products and services suited to demands of today’s real estate realities.
“Taking care of my clients, their interests, and the expectations of the policyholder are practices I take to heart. I would like to earn the distinction of being your title company of choice.”– Adam Plevyak
