What does a title company do?

2016.photo3Title Searches, title insuranceTitle Companies play a quiet role in a Real Estate transaction. However, we handle one of the most delicate parts of the process. We make sure that the sellers listed on the contract owns the property being sold and research if there are any liens or judgments against the sellers that attach to the property being purchased. We coordinate with all parties involved in the settlement and we look for any potential problems in the transactions then clear any “title defects” in a timely manner. At the settlement table we collect funds from parties involved, transfer ownership, and issue title insurance for both purchaser and lenders.

What is title insurance and why do I need it?

For the new homebuyers, title insurance guarantees that you are protected from financial loss if a covered defect is found in the title to your home. It offers you information on the status of the title to land before you buy or refinance and protects against title claims that may affect the title after you buy. Having title insurance can save you money, time, trouble, even your home!

There are two types of title insurance. Lender’s title insurance and Owner’s title insurance.

The Lender's policy is a separate policy which protects the lender's interest in the property, up to the outstanding balance of the buyer's mortgage. The loan policy protects the lender against loss due to unknown title defects. This policy protects only the lender's interest; it does not protect the buyer. The Owner's policy protects the owners against loss due to any “hidden hazard" that can result in a claim against your ownership. Owner’s title insurance is usually issued for the amount of the real estate purchase. You pay a one-time fee at closing and lasts as long as you or your heirs have an interest in the property.

Owner's coverage provides for legal defense and any liability or loss that may arise in a title problem that was not uncovered during the title search.

How does title insurance work?

2016.photo1According to the American Land Title Association, title companies find and fix problems with the title in 25% of transactions - usually without the borrower or lender even knowing it! In addition, title companies pay millions of dollars each year in claims. Title insurance provides significant value to lenders and homeowners.

Before closing, Realty Title searches both our title plant and the public records for all matters affecting title. These records include recorded documents, judgments, liens, taxes, easements and other matters that could affect property ownership.

Through careful examination of these records, we determine who owns the property and what interests may already exist in that property. This process, called a title search, provides early warnings of title flaws that must be dealt with before the property can be sold or refinanced.

In those transactions where title insurance is involved, Realty Title Company, Inc. must determine insurability of the title as part of the search process. This leads to the issuance of a title policy, which insures the existence or non-existence of rights to the property.

How does title insurance differ from other types of insurance?

Title insurance is substantially different from other types of insurance coverage. Title insurance emphasizes risk prevention rather than risk assumption, so the coverage offers the best possible opportunity to avoid claims and losses in real estate transactions.

Because of the important corrective work that title professionals perform, it is rare for lenders or homeowners to suffer a loss under their title insurance policy. However, even the best title search, performed by the most experienced and capable experts, cannot ensure that no title hazards exist.

Title insurance is charged only once at closing, where other forms of insurance typically require monthly or quarterly payments.

Do title companies charge different rates for title insurance?

Title insurance rates are set by state insurance commissions and are based on the purchase price of your property (owner’s policy) and the loan amount (lender’s policy)

Am I required to purchase title insurance?

Lenders will require that you purchase a lender title insurance policy on their behalf, while the Owner’s title insurance policy is optional. However, by purchasing the owner’s policy you are making the smartest decision.

How long does my coverage last?

For as long as you or your heirs retain an interest in the property or have any obligation under a warranty in any conveyance of it.

If the title company does it's job right, why should I need to purchase title insurance?

The title examination performed by Realty Title Company is thorough, but limited to public records. Suppose a previous owner recorded his or her marital status incorrectly, resulting in a possible claim by a legal spouse. Or a prior owner of your property recorded a forged deed. There would be no way for the title company to know that this document was a fake. At some point, the rightful owner could come forward to claim ownership of the property. Without title insurance, your investment is at risk.

Who chooses the title company, and why should I choose Realty Title Company, Inc.?

By law the consumer has the right to choose the title company of choice to conduct your settlement. Realty Title Company, Inc., established in 1896 is a locally owned and operated title plant. We are a full service title company and escrow service for Fergus, Judith Basin and Petroleum counties.

Do all title companies charge the same fees for their services? If not, shouldn’t I base my decision on the lowest title charges?

Fees may vary from company to company. When selecting your title company it is more important to consider the qualifications of the title company, such as quality of service, knowledge and experience. Realty Title Company, Inc. was established in 1896. We are a locally owned title company with a complete title plant serving Fergus, Judith Basin and Petroleum counties.

Who does the title company represent?

The title insurance company does not represent the buyer or the seller, or the lender in the manner that an attorney would represent a client. The title company is, in effect, legally neutral. The title company’s task is to transfer the property in compliance with the terms of the contract and the requirements of law, and to close the loan in conformity with the instruction of the lender.

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