Title Insurance Overview
Title is your ownership right to your property. A clear title provides for you to use or modify your property.
A Title Professional is the person who examines or researches public records to see if there are problems or defects that could cause you legal issues. They may also manage the closing process and write the title insurance policy reducing your risk of future ownership issues.
Title Search is an early step in the home buying process. Any issues that could limit rights to the property are usually uncovered at this step. If an issue is discovered it can be fixed by the title professional allowing for a commitment of title insurance to be issued.
There are two different Types of Title Insurance: the owner’s policy and the lender’s policy.
- The Owner’s Policy is purchased by the buyer. This provides the buyer with protection in case an undiscoverable defect comes up after the title search. These title issues could include forgery, fraud or clerical errors and without title insurance the buyer could potentially lose the property.
- The Lender’s Policy is usually paid for by the seller and is almost always required by the lender who is financing the purchase. The lender’s policy only protects the interest of the lender.
Escrow is an arrangement in which a neutral third party, called and escrow holder, holds legal documents and funds on behalf of a buyer and seller. The escrow holder distributes funds and documents according to the buyer’s and seller’s instructions. By acting as a neutral third party, the escrow holder can facilitate the real estate closing.
Closing (also known as settlement) is the final step in the process that allows the transfer of ownership to occur. It is where final contracts are signed, funds are distributed, and the buyers are handed the keys to the home.