Title Insurance - What is it?

Title insurance is similar to many other types of insurance. Title insurance protects a Buyer or lender from defects in the title to the real estate. Title insurance protects against loss resulting from any inconsistencies in the title of a property from liens or other title problems relating to a property. Title insurance is an actual insurance policy which a Buyer or lender receives after a closing. The title insurance company promises the Buyer that he/she has good title to the real estate. In addition, a loan policy promises the lender that it's mortgage has first position as far as liens are concerned. A lender wants to protect their interest in the property and a title insurance policy is an efficient way to accomplish this protection. In addition, Buyers should always insist upon an owner's title policy to protect their equity in the property. Final title insurance policies are issued after a complete search and examination of the public records which shows the condition of the record title, including any money obligations outstanding against the property, easements and other matters which may affect the rights of ownership, possession and use of the property.

Remember, real estate, like every other asset is worth protecting. A title insurance policy provides you with peace of mind. It takes the risk out of acquiring real estate. Typically, a Buyer or lender knows nothing about the history of the real estate involved. Title Experts, LLC researches the history of the real estate and provides a thorough report of any negative conditions that must be cured prior to good title being conveyed. In this day and age, it is not uncommon to find unreleased mortgages, judgments or construction liens against real estate. Through the years, your new property may have changed hands many times through sale, inheritance, foreclosure or bankruptcy. Each transfer was an opportunity for an error in title to arise. If an error occurred, and has never come to light, it puts your title in jeopardy. You could lose your property and the money you invested in it. And, even if you successfully defend your rights of ownership, the cost in time and legal fees could be prohibitive.

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Types of Title Insurance

There are two types of title insurance: First, there is Lenders title insurance, also called a Loan or Mortgagee Policy, and Owner's Title Insurance. Lenders generally require a Loan (Mortgagee) Policy when they issue you a loan which is secured by real estate. The Loan Policy is usually based on the dollar amount of your loan. It protects the lender's interests in the property should a problem with the title arise. This insurance protects possibly the most important investment you'll ever make - your investment in real estate. The Loan or Mortgagee Policy protects the lender for the amount of their loan. If they loan you $80,000.00 on your property, then their policy will be for that amount only. Secondly, there is Owner's Title Insurance. As the name implies, an Owner's Policy insures the new owner of the property. The policy, subject to legal conditions, guarantees that ownership is free from defects or encumbrances, except any listed as exceptions in the policy; the policy further guarantees that the new owner has access to the land. Moreover, the Owner's Policy will guarantee that you have the legal right to sell the property and convey marketable title to a new owner, subject to any new restrictions on the property imposed by the new owner. If you buy the property for $100,000, then the owner's policy will be written for the full amount of the purchase price. It is purchased for a one-time fee at closing and lasts as long as you own the real estate. Only an Owner's Title Insurance Policy fully protects the Buyer should a problem arise with the title that was not uncovered during the title search and closing process. Owner's Title Insurance also pays for any legal fees involved in defending a claim to your title.

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In what ways am I protected?

In order to issue a title insurance policy, Title Experts, LLC must generate a search of public land records for matters affecting that title. This may require a search of the "chain" of title back 60 years. According to ALTA (the "American Land Title Association"), Twenty-five percent of title searches find a title problem that is fixed before the insurance is issued. Some examples of items that can cause a problem are: deeds, wills and trust that contain improper information, outstanding judgments or tax liens against the property, and easements. Title Experts, LLC makes the parties aware of the problems and either repairs the defects before closing or has the necessary corrections made by an expert. After all corrections are made and defects are cured, then Title Experts, LLC issues the final policies. Title Experts, LLC ensures that the "record" title, is good subject only to the exceptions expressly set forth in the title insurance commitment and eventually the final policy. Title insurance insures against certain matters which do not appear of record, such as forgery, identity of parties, incompetence of former owners, interest of missing heirs, and status of individuals not having the "right" to sell property. Occasionally, in spite of an exhaustive title search, hidden hazards can emerge after closing. Items such as mistakes in the public record, previously undisclosed heirs claming to own the property, or forged deeds could cloud the title. Title insurance offers financial protection against these by negotiating with third-parties, and paying claims and the legal fees involved in defending the title. ALTA reminds us that owner's title insurance is necessary to fully protect a Buyer. Lender's title insurance, which is usually required by the mortgage lender, serves as protection only for the lending institution. The loan policy protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of the sale.

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Are there any problems that a title search cannot reveal?

Yes. there are some &quothidden hazards" that even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his marital status, resulting in a possible claim by his legal spouse. Other &quothidden hazards" include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names and clerical errors in the records. These defects can arise after you've purchased your home and can jeopardize your right to ownership.

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What can make a title defective?

A title is the evidence that you have outright ownership and possession of land. In Wisconsin title to real estate is evidenced by a deed. There are many possible causes of title defects that no examination can disclose. This occurs because certain documents may never have been recorded and thus do not appear in the public record. A title insurance policy protects the owner against all these hidden risks. Hidden risks include the items listed below, and many more:

Fraud: False claims of ownership, forged deeds, wills, signatures, conveyances, instruments, false representations, false records of all sorts, illegal acts of trustees, guardians, administrators, and attorneys.

Human Error: This includes errors in copying, indexing, or recording; and errors by administrators, executors, trustees, guardians and attorneys. This might also include the destruction of records.

Improper Deeds and Wills: Deeds by persons of unsound mind, minors, deeds delivered after death or without the grantor's consent; invalid, suppressed erroneous wills, missing heirs, unsettled estates.

Liens and Other Rights: Liens for unpaid estate, inheritance, income, property and taxes; homestead rights, community property rights; irregular court proceedings, money judgments against the Seller or Buyer, court opinion reversals, lack of court jurisdiction; defective foreclosures. The standard owner's policy and standard mortgagee policy are based on public records maintained by the Register of Deeds office for the county where the real estate is located and also upon searches of other public records. Title insurance does not insure against matters that would only be disclosed by actual inspection or survey of the property. It also does not insure against certain matters not shown by the public records, such as unrecorded easements, liens or money obligations, unrecorded utility rights of way, public or private roads, community driveways and other types of encumbrances, or against the rights or claims of persons in possession of the property who are not shown by the public records.

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Who chooses the title company?

Most owners of real estate and Buyers let the realtor and/or lender choose where their closing will take place. Normally they will just accept the title company that the Realtor or Lender has selected, not knowing they have a right to choose who performs the closing themselves. Federal law provides that a Seller may not force a Buyer to use a particular title insurance company. If your realtor or lender has selected your Title Company for you, don't be afraid to ask them why. Many title companies are national corporations. Title Experts, LLC is a local company with an excellent reputation. Please instruct your realtor and lender to have Title Experts, LLC provide your title insurance and perform your closing. Your realtor and lender do not pay for the title company's services. You do. Be a wise consumer and make your choice known.

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What happens at closing?

The "Closing" is one of the final steps in the process of buying/selling or refinancing a home. It is when all parties involved, including the Buyer and Seller, meet to finalize the transaction and where purchase money and ownership documents, including the conveyance deed exchange hands. The Closing only occurs once all the conditions of the real estate contract and the lender's requirements have been met.

The location of the closing is typically at either the lender's office or at a local title company. Depending upon your geographical area, all parties may or may not be present at the same time in a closing. For efficiency, the Seller may sign all his/her documents at a different time than the Buyer. This is known as an "Escrow Closing." In an Escrow Closing the Seller may or may not receive his/her proceeds check on the same day. The other type of closing is when all parties are present at the same time. This is known as a "Round Table Closing." In this type of closing, the Seller will receive his/her proceeds at the closing. Regardless of the type of closing, the documents signed will typically be the same.

At the closing, identification is verified, funds are collected and documents are explained, signed and notarized. A breakdown of all closing costs is listed on the HUD-1 Settlement Statement. The HUD-1 Settlement Statement also sets forth the net proceeds amount due to the Seller and the amount of funds needed from the Buyer. The Seller will provide keys to the property or arrangements will be made to do this at a later date. All parties at the closing will receive copies of the documents that were signed at closing. When the closing is complete, the deed and any new mortgage are recorded with the Register of Deeds' office for the applicable county to create a public record of the transaction. After the closing is completed, the Buyer should receive his/her owner's title insurance policy from the title insurance company. In addition, the Buyer will receive the original recorded deed from the Register of Deeds' office within a few weeks after closing.

Documents you can expect to sign at closing may include, but are not limited to the following:

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What items will I need at closing?

Items required will vary depending upon the type of transaction. In all cases, you must have a government issued picture ID, and any documents required by the lender. The Buyer also will need to bring a certified check or cash in the amount of the 'cash due at closing' as stated in the HUD closing statement.

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What is a HUD-1 Settlement Statement?

It is a standard form created by the federal government that summarizes the transaction and itemizes all costs involved. You will receive a copy of the settlement statement which also requires signatures at the closing.

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Why do I need the services of Title Experts, LLC?

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When do I contact Title Experts, LLC?

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How are fees determined?

Title fees and charges are regulated by the state insurance commissioner's office and vary from state to state. Don't be afraid to ask Title Experts, LLC for an estimate of costs up front. If you choose to go with a title company whom charges less, you may get what you pay for. Closings can be delayed for weeks because the title agent cannot perform the duties it has been hired to do, such as perform a title search and clear the title to make it marketable. The responsibilities of the title agent are vital to your investment or sale. When you evaluate Title Experts, LLC you will discover we are very competitive and provide the service you desire. The amount and type of coverage provided determines the cost of title Insurance. Unlike other insurance premiums, however, the title insurance premium is paid only once, as the policy is effective for so long as title or "ownership" remains in the name of the insured. Title Experts, LLC, offers a licensed staff, experienced in the Real Estate Industry. When you are dealing with Title Experts, LLC, you are dealing with a competent and knowledgeable professional. If your request is outside the scope of our service, we will refer you to someone who can handle your situation. Kindly consider placing your title insurance or closing order with Title Experts, LLC. We will provide you with excellent service and prompt results.

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Does the purchase and sale process vary with the type of real estate involved?

The basic process remains the same regardless what type of real estate is involved in the transaction, but certain elements may have greater or lesser importance.There are things to consider in buying or selling a farm that differ from those involved in a resort condominium unit, a factory, a home, or an investment property. Title Experts, LLC can help assure the different elements of the transaction are fully considered.

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I'm buying a newly built home, do I need Title Insurance?

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What do I need to know about building a home?

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What is a land contract?

A land contract is used when the seller finances the buyer’s purchase of the property.  Rather than paying the entire purchase price at closing, the buyer pays the seller in installments and receives a deed when all payments are made.

For the buyer, a land contract may be the only financing available depending upon economic conditions, the type of property, or the buyer’s creditworthiness. A land contract may have a small down payment, fewer closing costs, and even a lower interest rate than a mortgage. Often a land contract will have a short term and involve a lump sum (balloon) payment of the balance when the buyer’s equity will allow mortgage financing of the property. For the seller, land contract financing may be the only way to put the sale together.

Enforcement of a land contract is somewhat easier than a mortgage, but the seller assumes the risk that it will have to retake the property and resell it.

The land contract is a flexible financing instrument that involves detailed negotiation. The parties need good technical advice to assure that the land contract reflects their agreements and that their interests are protected.

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Refinancing - why do I need Title Insurance?

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When can a lender foreclose on a property?

A significant breach, such as failing to make payments or damaging the property, will allow the lender or land contract vender to foreclose. Foreclosure terms are stated in the mortgage or land contract. Foreclosure may result in the sale of the property and loss of the buyer's interest in it.

Under state law, the buyer may have the right to be notified of his or her breaches and to correct them. Different provisions apply in different circumstances.

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