Facts About Closing
Q. What is title insurance?
A. Insurance which protects the lender and the homeowner against loss resulting from any defects in the title or claims against a property that was not uncovered in the title search.
Q. What is a title?
A. A title is the evidence of right that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.
Q. What is a title search?
A. A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to verify the sellers’ right to transfer ownership, and to discover any claims, defects, or other rights or burdens on the property.
Q. What problems can a title search reveal?
A. A title search can reveal several types of defects and liens, as well as other encumbrances and restrictions. These include unpaid property taxes, unsatisfied mortgages,, judgments against the seller and restrictions limiting the use of the property.
Q. What can make a title defective?
A. Several problems could remain undisclosed, even after the most extensive search of the public records. These hidden defects are dangerous, because it could be months or years before they become known. Yet the owner could be forced to pay large sums of money to defend these claims. When you purchase a title insurance policy, you receive protection from these and a host of other hidden defects.
Q. What does title insurance cost?
A. A lot less than you probably think. Fees vary per different sections of the country, but generally the cost of title insurance, including search, exam and related services, amounts to about one percent or less of the cost of the property.
Q. What is a closing?
A. Closing, which is also known as settlement or escrow, is the event where the title to the property is transferred from seller to buyer. Closing is typically held in an office, such as that of the title company or attorney, and involves the completion of all the forms or paperwork to finalize the agreement between seller and buyer. Also, all financial issues are settled at closing. Once the title is successfully transferred, the necessary documents are prepared, signed and filed with the local authorities.