1.
What is title insurance?
Title insurance is an indemnity against loss
resulting from defects in the title to the property. Defect take many forms — from
bad deeds to long lost heirs. By issuing a title policy, the title company is
saying: "We have searched the title to this property, and find it to be
good. We guarantee it."
Title insurance differs from other forms of insurance.
A title policy insures against matters of the past, and the premium is paid only
once — at closing. The policy remains in effect for as long as the insured
or the insured's heirs hold title.
2.
Besides issuing title policies, what
is the role of the title company?
The title policy, although the tangible product
of the title company, is only a small aspect of the total role the title company
plays in a real estate transaction. The company is called upon to close the deal.
Before the actual closing can take place, however, hours of painstaking
preparation must be done. This involves collecting and coordinating many pieces
of information from many different sources including the real estate professionals,
lenders, termite company, surveyor, hazard insurance company, et al. This is
all typically done under exacting time constraints.
3.
How much does title insurance cost?
The title premium is tied to the purchase price. An owner’s
title policy in Florida costs $5.75 per $1,000 of the purchase price up to $100,000.
Over that mark, the rate is $5.00 per $1000, with additional rate adjustments
as the liability amount increases.
For example,
for a $150,000 home, the title premium would be $825.00
($100,00 x $5.75 =) $575
+ ($50,000 x $5.00 =) $250 = $825.00.
The search and closing fee, required by
Florida law, vary depending on the company used. You have a choice when it comes
to title insurance, so please ask Southern Title to provide you with a quote.
4.
What is a reissue premium and how does it benefit me?
You have the opportunity to enjoy a
reduced title policy premium when you
sell or refinance property. There are
several circumstances which afford you
this opportunity, namely:
Please alert your closing officer immediately if you qualify so he/she may provide with this premium rate.
Reissue premium rates:
The reissue premium is calculated at
$3.30 per thousand up to $100,000;
$3.00 per thousand over $100,000 and
up to $1 million; $2.00 per thousand
for over $1 million to $10 million;
and $1.50 per thousand for dollar amounts
of $10 million.
Example of a calculation:
A loan policy in the amount of $325,000
is issued; the borrower has a previous
$200,000 issued on the same property.
The calculations would be as follows:
Reissue rates (on the $200,000):
$100,000 x 3.30 = $330
$100,000 x 3.00 = $300
660
Original rates on the new policy amount
of $125,000:
$100,000 x 5.75 = $575
$25,000 x 5.00 = $125
$700
So, when you add the two together ($700
+ $660 = $1360.00), the premium total
equals $1,360 plus any additional endorsements
which may be requested, such as Form
9, which is 10% of the total premium,
or in this example, $136.00. Based on
the premium for a $325,000 title policy
with no reissue credit, the amount saved
would be $340.00 ($1,700.00 minus $1,360.00)
5.
Do I really need title insurance?
Every day in America, someone somewhere is buying or selling
a home. And behind the scenes of each transaction is the title insurance
industry. At Southern Title, our detailed-minded professionals conduct in-depth
searches
to uncover and remedy any problems with the title of ownership.
It could
be a boundary dispute, a tax lien, a mechanic’s lien, utility assessments,
home improvement code violations . . . the list goes on and on. At Southern Title,
we look for these possible problems, and them make every effort to resolve them
so you can move into your new home with assured peace of mind.
Plus if
a title problem should arise in the future – even decades later – your
Owner’s Policy of Title Insurance can protect you, even to the point of
paying for legal representation.
For Southern Title, it is all about protecting your piece of the
American Dream . . .and protecting your peace of mind.
6.
What kinds of title problems actually
occur?
“I thought the mortgage was paid off.”
Despite
our information age, the fact is some “paid off” mortgages never
get registered as having been paid off.
So when a homeowner goes to sell the property, the title search
may turn up a previous mortgage that the seller never knew existed. On paper,
it looks like the property has two mortgages that need to be paid off, and that
can hold up the sale.
There are many reasons this could happen, but most common is a slow,
incorrect or nonexistent filing by the previous mortgage holder. In this case,
Southern Title has to determine if the prior mortgage truly was paid off, or
if it wasn’t satisfied, how to pay it. Either way, the issue needs to be
resolved before the house can be sold.
7.
What is the difference between a
Lender's Title Policy and an Owner's
Title Policy?
Having a clear title is important to the sale and purchase
of a home. Title insurance IS important to you, the new homeowner.
When you obtain
a loan to buy your home, your lender will require that you purchase Lender’s
Title Insurance. This protects the lender’s investment, but it provides
no protection for you or your investment. Ask your real estate agent, lender
or attorney about getting an Owner’s Policy of Title Insurance from Southern
Title.
An Owner’s
Policy is your assurance that Southern Title will stand behind you–monetarily
and with legal defense–if a title problem arises after you buy your home.
Even the best title search, performed by the most experienced and capable experts,
cannot ensure that no title hazards exist. Some problems just aren’t revealed
in the painstaking review of available records. Years ago, there may have been
an honest mistake in determining the status of title. Or today, a previously
unknown heir may come forward to claim ownership of a deceased relative’s
property. There might even be a forged deed that impairs the ownership of the
property.
Bottom
line: Southern Title will be there to help pay valid claims and cover the costs
of defending an attack on your title. Receiving an Owner’s Policy isn’t
always an automatic part of the closing process, however. Be sure to request
one, because without it, you could be liable for these costs and legal fees,
even if you prevail in a legal action.
8.
Do I need a copy of the survey?
When you close on your home, remember to get a copy of your
survey and keep it in a safe place with all your real estate related documents.
Your survey shows, in explicit detail, your boundary lines, the exact location
of your home, easements that may be located on your property, common areas you
may abut to, set backs, any encroachments (fences, roadways, swimming pools,
outbuildings), fences and roadways.
In addition,
a survey is required in order to get flood insurance. Any future construction
that you perform on your home, such as a new fence, swimming pool or other structure
will require a survey in order to pull a permit.
9.
Who chooses the title company?
Typically, whoever is paying for the Owner’s Policy chooses
the title company. In most cases, that is the seller. If you are in need of title
insurance, please contact Southern Title so we can answer any questions you might
have and provide you with a quote.
10.
I'm selling, so why is title insurance
important to me?
Any prospective buyer will need evidence that his
or her investment in your property is free of title defects. In fact, your contract
of sale probably requires it. The title insurance policy that you provide the
buyer is a guarantee that you are selling a clear title to your real estate,
unencumbered by any legal attachments that might limit or jeopardize ownership.
The Southern Title name reassures your buyer that the title has passed the most
careful scrutiny. In addition, it can help your deal close more quickly and easily.
11.
What does Southern Title need from
me?
From the seller,
Southern Title needs a copy of the Contract for Sale and Purchase and a copy
of the title policy you received when you purchased the property (the prior title
policy), if you have one. If there is an outstanding mortgage, the title company
will need the name and address of the lender and the loan number. From the buyer,
Southern Title will need the name and address of the new lender, if any, and
the name of the buyer’s insurance company.
12.
What's in a title search?
You've
decided to purchase a home and hope to take possession as soon as possible. The
terms have been agreed upon and all the financial arrangements have been made.
But there's one important detail remaining. Before the transaction can close,
a title search must be made.
The
most accurate description of title is a bundle of rights in real property. A
title search is the process of determining from the public record just what these
rights are and who owns them.
A
title search is a means of determining that the person who is selling the property
really has the right to sell it, and that the buyer is getting all the rights
to the property (title) that he or she is paying for.
Southern
Title is qualified to handle the search process throughout the state of Florida
and in most cases can return that search in 72 hours or less.
At that point, Southern Title must determine insurability of the
title as part of the search process. This leads to the issuance of a title policy,
which insures the existence or non-existence of rights to the property.
Southern
Title will, at its own expense, defend the title and will pay losses within the
coverage of the policy if they occur.
