| Conducting a title search prior to transfer of real | | | | future time, a claim is made against your property due |
| estate property involves searching for every available | | | | to one of these hidden risks, your title insurance policy |
| record or document that relates to present and prior | | | | will cover the costs of a legal defense. If the claim is |
| ownership of the property in question with the goal of | | | | upheld by the court, the policy will reimburse you for all |
| clearly defining the current status of the property title. In | | | | or part of the actual loss, depending on the value of |
| layman's terms, we want to be sure that the property | | | | the policy. |
| being sold truly and completely belongs to the seller | | | | In the case of refinances, most state law requires that |
| and that he or she has the legal right to transfer | | | | the lender secure a Mortgage's Policy of Title |
| ownership of the property. | | | | Insurance. This policy guarantees the lender that a new |
| Records searched will include public and court records, | | | | mortgage will be the first and only mortgage on the |
| property tax records, deeds, mortgages, wills, | | | | property, and that all prior mortgages and liens have |
| judgments, divorce decrees, liens, claims, and other | | | | been paid in full and satisfied. This policy is generally |
| legal proceedings or findings. Any defects found in the | | | | paid for by the person refinancing as part of the |
| title to the property, will have to be cleared or | | | | closing costs. |
| otherwise dealt with prior to transferring ownership. | | | | The attorney or title company closing your transaction |
| If title has been searched and cleared prior to the sale | | | | will handle the title search but you can also perform |
| of a property, then why is there a need for title | | | | one as well, if you want. Of course your attorney, Title |
| insurance? Even the most thorough title searchs may | | | | Company or lender will not accept your search to |
| fail to find certain risks, which due to their nature, are | | | | close your property but you can get an idea if there |
| "hidden" and not necessarily documented. These could | | | | are any encumbrances on the property. If you are |
| include such situations as: | | | | paying cash then you will want to buy title insurance |
| Errors in property boundaries due to inaccurate | | | | for yourself. If you are funding the closing with a lender |
| surveys | | | | the closing agent will provide a lenders policy and offer |
| Claims made by heretofore missing heirs | | | | you a policy for an additional fee. The fee is usually at |
| Mistakes in probating or interpreting previous wills | | | | a discount since they already have a lender buying a |
| Legal documents executed under fraudulent power or | | | | policy also. |
| attorney | | | | The reason they offer you a policy is because the |
| Clerical errors in recording legal documents | | | | one the lender buys only covers the loan and loan |
| False impersonations and/or forgeries | | | | amount. You need one to cover you and your |
| Claims not documented in the public or court records | | | | purchase price. Don't worry too much about title |
| Hidden risks such as these make title insurance a | | | | searches and insurance, as the closing attorney or Title |
| necessary and wise one-time investment. If at some | | | | Company will take care of all of that for you. |