WHAT IS TITLE INSURANCE?
Title insurance is a form of indemnity insurance that protects real property owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property. Basically speaking, when a property is bought or sold, a record of the transaction is filed into public archives. Events that may affect the ownership to this property such as liens or zoning restrictions also get archived. This becomes part of a property’s title.
When you purchase title insurance, the title company will perform a thorough search through these and other records to reveal any issues with the ownership of the property. The search may also look at deed, tax and court records to verify ownership history. If you have an issue with the home before or after closing, your policy covers you against any losses.
HOW DOES IT PROTECT THE BUYER?
Title insurance protects property buyers and mortgage lenders against defects or problems with a title when there is a transfer of property ownership. If a title dispute arises during a sale, the title insurance company may be responsible for paying specified legal damages, depending on the policy.
HOW DOES IT PROTECT THE SELLER?
It doesn’t. The owner’s policy of title insurance only protects the interests of the buyer, not the seller, even if the seller paid for the premium for the policy.
IS IT THE SAME AS OTHER TYPES OF INSURANCE?
No, title insurance is quite different. Most insurance policies, such as fire life, health and auto insurance, protect against potential future events and are paid for in advance with monthly or annual premiums. Conversely, title insurance policies insure past or present losses, up to the day escrow closes.
WHAT DOES IT COVER?
Title insurance protects against claims from defects, such as fraud, forgery, liens, encroachments, another person claiming an ownership interest, improperly recorded documents, easements and other items that are specified in the insurance policy.
WHO NEEDS IT?
Lender’s title insurance policies are mandatory for buyers; owner’s policies are available but not required. When you purchase a home with cash, however, you bypass many of the requirements mortgage lenders have. Lender’s title insurance, for example, is no longer required since you’re not using a lender.
WHAT IS ESCROW?
Escrow refers to a third-party service that is part of every home purchase. When a buyer and seller initially arrive at a purchase agreement, they select a neutral third party to act as the escrow agent. The escrow agent collects a deposit from the buyer that is equal to a small percentage of the sale price. This deposit is known as “earnest money”. In exchange, the seller takes the property listing off the market. Until the final exchange is completed, both the seller’s property and the buyer’s deposit are said to be in escrow.
WHY CHOOSE CITRUS HERITAGE ESCROW?
When choosing an escrow company there can be many important factors to evaluate. Fees, location, staff and even recommendations from friends and colleagues are all things to consider. With Citrus Heritage Escrow by your side, you can rest assured that when you receive your settlement check, you’ve gained the maximum benefit from your home sale or purchase.
Call us today with any questions or concerns. Our professional Escrow Agents will help you through this exciting yet confusing process. (951) 335-7200