SOME COMMON QUESTIONS ABOUT TITLE INSURANCE

What is Title Insurance and how does it protect me?

Title Insurance protects what is probably your most valuable investment from potentially devastating financial loss.  Almost all Real Estate purchases in the State of Florida involve or require Title Insurance, although many purchasers of Real Estate do not understand the value of title insurance or what it protects against.

Two Title Insurance policies are usually purchased and issued in a typical Real Estate transaction involving mortgage financing. Most lenders require a Lenders (or Mortgagee) Policy as a condition to making you a loan secured by Real Estate.  The Lenders policy insures the enforceability of the Lender’s mortgage and its priority over other liens. The cost of a Lender’s policy is dependent upon the loan amount, however, it is available at a significant discount when purchased in conjunction with an Owner’s Policy (simultaneous issue).

The Owner’s Policy of Title Insurance protects the purchaser from a myriad of potential defects which could result in a complete loss of their investment. Owners Title Insurance pays the legal costs associated with defending the owners claim to title of the property.  In the event of a covered loss, the Owners Policy would provide coverage against loss up to the purchase price.

What does it cost, and who pays for it?

The cost of the Owner’s Policy is dependent upon the purchase price. Unlike homeowners and other types of insurance, the Owner’s Title Insurance premium is paid one time at closing and affords coverage for as long as you own your property, and beyond.  Who pays for title insurance at closing is a matter of contract.  In Broward and Dade Counties, it is generally the Buyer’s responsibility to pay for title insurance, and consequently choose the closing agent (title company or attorney).  In Palm Beach County the Seller generally pays for the Owners Policy and chooses the closing agent.  These conventions can be changed by agreement of the parties in their contract.  Choose with confidence.  Choose Closing Express.

What does the Closing Agent / Title Agent do?

Part of what the Closing Agent / Title Agent does is “behind the scenes.”  In order to issue title insurance, the closing agent must search public land records for matters affecting that title. Most searches are conducted back to an acceptable “base” title.  The Title Agent reviews the documents affecting the subject property to determine, among other things, the actual owners of the property, other parties that have an interest in the property and any liens that need to be satisfied at closing in order for the buyer to obtain good marketable title.  A significant percentage of title searches reveal title problems which are resolved or fixed before closing.

A careful title search and title examination will reveal most problems and eliminate most risk.  Despite an examiner’s best efforts, defects and problems can arise after closing. Things such as mistakes in the public record, previously undisclosed heirs claiming to own the property; or forged deeds could cloud title. Owner's title insurance provides security, piece of mind and protection against these and other myriad dangers by providing legal representation to defend title and ultimately by paying claims.

The more “visible” part of the Closing Agent / Title Agent’s job is actually preparing for and conducting the closing.  In a purchase, the Closing Agent’s involvement may begin as an escrow agent.  In most cases a Real Estate Agency or Realtor© will hold the buyer’s good faith deposit, but very often it is the closing agent that holds escrow.

Your Closing Agent / Title Agent will collect needed relevant documentation and information from all parties (Buyer, Seller, Real Estate Agents, Lender) in order to close the transaction in a timely manner. Your Closing Agent / Title Agent will order payoff statements for any mortgages or liens which must be paid at closing.  The closing agent will typically order evidence of insurance required by the lender, will order surveys and other matters required to examine and insure title.  The Closing Agent / Title Agent will prepare a closing statement showing the cash to and from buyer and seller (or just borrower in a refinance).  The Closing Agent / Title Agent will coordinate the closing date and time with all parties and will conduct the actual closing.

I'm refinancing, do I need title insurance?

In most cases, Yes!  When you refinance you are obtaining a new loan, even if you stay with your old lender.  Your lender will require title insurance to protect their new loan on the property. The good news is you may be entitled to a Discounted Rate known as a “reissue rate.”

I'm buying a newly built home, do I need title insurance?