FAQ
Female Veteran Owned and Operated
Serving Citrus County and surrounding areas for over 35 years
Frequently Asked Questions
What is Title Insurance?
In a real estate transaction, title insurance is a policy that protects both the lender and the buyer against any potential loss derived from problems related to the property’s title. A title insurance policy covers the insured party for any claims and legal fees that might result from problems with the title.
Who chooses the title company?
The person paying for the insurance is the one who chooses the title company. That is, if the seller is expected to pay for title insurance, they have the right to select the title agency; and if the buyer is the one paying for it, then it is their right to choose.
Title insurance is different from other types of insurance policies because it protects the insured party against past problems, rather than future problems. You also just have to pay a one-time premium.
Do I need title insurance?
Title insurance is something that buyers should have when purchasing a property. This is to prevent the buyer’s ownership from being compromised by undisclosed or undiscovered title defects that might surface in the future.
There is nothing that states it is mandatory to purchase title insurance. However, most lending institutions require it in order to grant the mortgage; plus, real estate professionals highly recommend it.
How does title insurance protect my investment in case of a claim?
If the claim has grounds and a judge rules against the buyer, the insurance issuer will compensate the loss up to the amount stated on the policy.
Additional to the claim or claims, the policy should cover the legal fees associated with any litigation derived from the issue.
Who pays for the title insurance policy?
The party responsible to pay for the title insurance policy is decided during contract negotiations. In most Floridian counties, it is the seller who pays for title insurance.
However, the “customary” approach varies from county to county. For example, in Miami-Dade and Broward counties, the seller is responsible for paying for the title search while the buyer is expected to buy their title insurance policy. In other counties such as Citrus County, the seller usually pays for both.
What sort of claims does a title insurance policy cover against?
Title insurance protects the buyer and/or the lender from title defects or claims that others may have to the property. It also protects the buyer from any outstanding debts of previous owners.
What the policy covers should be clearly stated within the terms but, generally speaking, title insurance policies cover any undiscovered defects or claims that appear once a thorough title search has been carried out. This might include forged signatures, unpaid real estate taxes, as well as other types of liens and encumbrances.
Are there different types of title insurance policies?
Yes, there are two types of title insurance—the lender’s policy and the owner’s policy.
A lender’s policy is required by many lending institutions to secure their interest in the transaction. A lender’s policy is valid until the mortgage granted to buy the house is paid in full.
An owner’s policy, on the other hand, provides protection to the person or persons who purchase the property against unforeseen title defects or clouds that might arise once the title has been transferred.
What is a title search?
A title search is the equivalent of a criminal background check for a property. It is an assessment of the historical record of a given property.
The title search examines deeds, court records, the existence of unresolved liens, recorded code violations, restrictions of use, easements, any judgment that might have been filed against the title, or any other burden.
This is done to make sure that the seller has the right to transfer the property.
The title agent carries out a thorough research in the county records to discover if there are any problems with the title that might jeopardize the buyer’s future ownership.
How long does my coverage last?
That depends on the type of policy. A buyer’s policy lasts as long as the policy holder owns the property, and sometimes it can extend to property heirs. A lender’s policy expires once the mortgage has been paid in full.
Why do I need title insurance if the builder of my home already has title insurance on the property?
A title insurance policy issued to the builder does not protect buyers.
Why is transferring a real estate title different from other types of property?
This is due to 2 main factors:
- A piece of land could have had many different owners before you (even if nothing has ever been built on it).
- Others might have additional rights over the property without necessarily owning it (mineral, air, utility rights, or easements).
To ensure what you are buying is rightfully yours without any impediments, a title search is necessary to determine if the title is clean; title insurance is the policy that ensures it stays that way, or that you are duly compensated if a valid claim arises.
If I’m buying a brand-new house, do I still need title insurance?
Even if you are buying a brand-new house, it is advisable that you get a title insurance policy. Why? There could be problems related to the land ownership of where the house is built. There can be mechanic liens attached by contractors who have not been paid in full for their services.
Another example of a potential issue is a piece of land that was previously owned by several people and was sold to the developer without the consent of one or more of the partial owners. In such a case, they can file a claim against the property.
My lender had me buy title insurance for them when I took out my mortgage. Does their policy cover me too?
No, as we explained before, there are two types of policy and each should be taken separately.
How long does it take to verify that a title is clear?
The title search and evaluation can take around 72 hours. However, if there are any problems with it that are revealed, it can take additional time to determine whether the title can be cleared before closing.
Reach Us
Stop by, give us a call or send an email
108 W Highland Blvd, Inverness, FL 34452
352-419-4599