What is a Title?
A title is the foundation of property ownership. It is the
evidence one has of right to possession of land.
What is Title Insurance?
Title Insurance is a policy that protects you against loss
if any problems result in a claim against your ownership.
These claims include fraud, improper court proceedings, missing
heirs, incompetence of previous seller(s), recording mistakes,
and unfilled liens. Title Insurance plays a major role in
ensuring home ownership is safe and protected from these threats.
The Title Insurance Company safeguards the homeowner against
loss due to any defect in title. Should a discrepancy arise,
it is the Title Insurance Company's obligation to provide
legal support to the homeowner.
Why Buy Title Insurance?
Title Insurance is necessary to protect the most important
investment you'll ever make, your home. Because land is permanent
and can have many owners over time, others may have acquired
various rights in the land, such as utility rights, before
you come into possession of it. In order to transfer a clean
title to a parcel of land, it is first necessary to determine
whether any rights are outstanding.
What is a Title Search?
A Title Search is a review of all recorded documents affecting
a specific piece of property to determine the present condition
of title. These documents include deeds, court records, property
and name indexes, and many other documents. The purpose of
the search is to verify the seller's true interest in the
title and right to sell property, and to discover any claims,
defects and other burdens on the property. First, a service
known as a title search describes the condition and quality
of the title to the land you are buying. Then, your title
insurance protects you against mistakes or threats that might
otherwise result in financial loss to you, since problems
with real estate are transferred with the ownership.
What kinds of problems can a Title
Search reveal?
A title search can show a number of title defects and liens,
as well as other encumbrances and restrictions. Among these
are unpaid taxes, unsatisfied mortgages, judgments against
the seller, and restrictions limiting the use of the land.
Are there any problems a Title Search
cannot reveal?
Yes. There are some "hidden" hazards that are impossible for
a search to uncover. For instance, the previous owner could
have incorrectly stated his or her marital status, resulting
in a possible claim by a legal spouse. Other "hidden" hazards
include fraud and forgery, defective deeds, mental incompetence,
confusion due to similar or identical names, and clerical
errors in the records. The defects can arise several years
after the purchase of your home and can jeopardize your right
to ownership.
What danger of loss can you face?
If a lender has title insurance and you don't, what possible
dangers can you face? As an example, let's say you bought
a house for $120,000. You've made a $20,000 down payment,
and your lender holds a $100,000 mortgage lien or beneficial
interest. Your lender has title insurance coverage protecting
his interest up to $100,000. 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 know at the time of sale. The loan
policy protects the lender's interest. It does not protect
you. That is why you need an owner's policy, which can be
issued at the same time as the loan policy for a nominal one-time
fee.
If the builder of my home already
has a policy on the property, why do I need it again when
I purchase the land from him?
A title policy insuring the builder does not protect you.
Also, a great many things could have happened to the land
since the builder's policy was issued. Liens, judgments, and
unpaid taxes for which prior owners were responsible may be
disclosed after you purchase the property - causing you aggravation
and costing you money.
How does Title Insurance protect my investment if a claim
should arise?
If a claim is made against your property, title insurance
will, in accordance with the terms of your policy, assure
you of a defense, and pay all court costs and related fees.
Also, if the claim proves valid, you will be reimbursed for
your actual loss up to the face amount of the policy.
What is the cost of Title Insurance?
The cost is directly related to the value of the property.
The higher the value, the more coverage is needed. The premium
is small compared to the total purchase price, usually one
percent or less of the value of the property. The premium
is paid only once and remains valid for as long as the property
is owned by the insured and continues to protect the insured
on warranties after it is sold.
How long does my coverage last?
The title insurance coverage never needs to be renewed. It
is valid for as long as you or your heirs have an interest
in the property.
Who needs our Title Insurance services?
Any individual, corporation, or organization involved in the
transfer of title or deed for real property will need the
services of a title insurance company. If that transaction
takes place in Michigan, Title One, Inc. is your best choice
to obtain the title insurance protection you need. Specifically
our services are utilized by:
Attorneys
Lending Institutions
Real Estate Professionals
(Brokers and Agents)
Commercial and Industrial
Builders and Developers
Residential Real Estate Buyers
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