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Title Insurance Basics
We understand the terms and phrases used in the title industry can be a little
overwhelming if you’re not familiar with them. So we’ve provided this list of
terms and frequently asked questions, in hopes of giving a clearer explanation
of the basic concepts you may encounter during your transaction.
What is Title Insurance?
Title insurance provides coverage against losses resulting from a defect in the
title.
What is the Role of a Title Agency?
The purchase of real estate is one of the most important decisions and largest
investments you’ll ever make. At Real Living Title Agency we ensure you obtain
clear, marketable title through our process of researching and examining the
public records on the prior ownership history. Once the research is complete,
we produce a title commitment, which is our promise to issue an owner’s policy
of title insurance clear of liens or claims against the property based on the
provisions stated in the commitment.
This policy protects you, the owner, should someone make a claim against the
title to your property. A lender’s policy of title insurance, which is
typically required by any lending institution, protects their interest and
rights as well.
Why Do I Need Title Insurance?
The current owner of a property has rights...so does the family and heirs of
the owner. Other external parties may have rights as well as a result of
holding open mortgages, unpaid/delinquent taxes, unpaid contractor’s liens,
etc. As a new owner of the property without the benefit of title insurance
coverage, you may not have knowledge of these, yet would still be vulnerable to
the claims against your property. A deed transfers a seller’s rights of
ownership to you, but does not provide this protection, and therefore, doesn’t
eliminate the risks of claims or rights of others against your property.
Following are examples of common risks covered by an owner’s policy of title
insurance:
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Claims of creditors against real estate sold by heirs
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Forged deeds, mortgage releases and other documents
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Claims by children born or adopted after the date of the will
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Claims by previously undisclosed heirs
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Administration of estates of persons absent, but not deceased
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Deed by minors, aliens or persons of unsound mind
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Descriptions of property that appear accurate but are not
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Mistakes in public records
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Misinterpretations of wills
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Fraudulent acts
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