What to Expect

Search Process

When you receive the keys to your new home, you may already have an idea about the work that goes into a successful closing.

However, few new homeowners recognize the efforts involved in searching and underwriting a title insurance policy – one part of your closing that can prove invaluable down the road.

Your Title Goes Here

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Public Records Search

An in-depth title search is generally comprised of a thorough examination of public records. This can be difficult because, depending on the jurisdiction, liens and judgments on a property may be filed a number of ways – by the name of the buyer, the name of owner, the street address, lot number, etc. Many title companies today have created exhaustive and systematic methods for conducting these searches, resulting in large databases of consistently indexed data that facilitate faster and easier title searches. These “title plants,” or large stores of uniformly organized public data, help to complete title searches faster and help ensure accuracy.

Search Findings

Title searchers uncover more than simply liens and judgments, however. A thorough title search will include information about mortgages, street and sewer assessments, taxes and levies and countless other issues that could taint an otherwise sound transaction.

For instance, a title searcher may examine a property and find no judgments or liens, but uncover special building restrictions of which the buyer was unaware. Or the title search may disclose previously established easements, such as civil sewer or power. A title searcher may find that some part of the property encroaches on neighboring land, warning against possible ownership issues in the future.

New Construction

Even for a newly constructed property, a title search can be quite time-consuming. While the actual structure in question may be new, the land on which it resides has likely transferred hands countless times prior to the new construction, making ownership issues a possibility down the road. Additionally, and in particular with respect to a newly-built home, there is no guarantee that subcontractors and/or suppliers have not placed liens on the property for unpaid debts.

Behind the Scenes

The legwork behind the issuance of a title insurance policy is rarely seen by the buyers or sellers of a property. Title professionals work to remove any existing “clouds” (judgments, easements, liens, etc.) prior to issuing a policy in order to decrease their financial risk to insure the title. When a cloud is difficult to clear or significant enough to question the wisdom of following through with the transaction, the title company will make this known to the prospective buyer.

Peace of Mind

The data collected through a title search not only gives the buyer peace of mind regarding the property they’re purchasing, but also helps reduce the risk of title problems arising in the future. This makes a title insurance policy a valuable investment towards protecting an even greater investment – your home.

The Costs of Title Insurance

Your Title Goes Here

Minimizing Risk

In order to properly eliminate risk, the process of issuing a title insurance policy includes a thorough search of public records and court documents to assess and remove any “clouds,” or issues on the property’s title.

Claims

Because of the statistically small percentage of title insurance claims filed each year, it may be difficult for homebuyers to gauge the value of their purchase. However, the low number of claims actually illustrates the effectiveness of title insurance providers in locating and minimizing risks. In fact, a large piece of the premium paid for a policy goes to fund the legwork required to thoroughly research the property’s title. According to the American Land Title Association, the typical expense ratio for a title insurance company is 90 percent, compared with 30 percent for a property and casualty insurance company.

Fees

Because it is a highly regulated industry, title insurance policy types and costs will vary from state to state. You can check with your state’s Department of Insurance for more information on pricing regulations. In general, each policy price is based on the purchase amount of the home (for an owner’s policy) or the total amount of the loan (for a loan policy).

Length of Coverage

Also unlike other types of insurance, the purchase of an owner’s title insurance policy is a one-time event; there are no future premiums to pay as long as you or your heirs hold an interest in the property. That means this fee, generally paid when you purchase the property, will protect you and your family indefinitely for so long as you hold an interest in the property.
That said, if you refinance your home, your lender will likely require you to purchase a new loan policy, as this type of insurance protects the lending institution only for the life of the loan. Your owner’s policy, however, will remain effective.

Choice

While real estate agents often influence the choice of underwriter, as a consumer you have the right to determine your own provider. It can pay to do some research to determine which company would best suit your needs.

Feel Protected – 70+ Ways to Lose Your Home

A forgery 50 years ago; a deed executed under duress; bigamy that went unknown; an error by a clerk in the county recorder’s office; a misapplied tax payment — these are but a few of the hidden “title defects” that could cause you to lose your property. And, even if you don’t lose your property altogether, title problems could make it impossible for you to sell.

You don’t want a problem that occurred long before you bought your property to deprive you of ownership or your right to use or dispose of it. And you don’t want to pay the potentially high cost of defending your property rights in court.

An Owner’s Policy of title insurance is your best protection against potential defects that can remain hidden despite the search of public records. A Loan Policy of title insurance also exists to protect your mortgage lender’s interest.

For a one-time premium, Emerald Title Group will issue you a policy protecting you against covered losses suffered due to undetected defects that existed prior to the issue date of your Emerald Title Group policy, up to the amount of the policy. Your Emerald Title Group title insurance policy also provides for legal defense costs unless the matter is excluded or excepted.

Your title insurance policy protects you against potential defects such as:

Forged deeds, mortgages, satisfactions, or releases
Deed by person who is insane or mentally incompetent
Deed by minor (may be disavowed)
Deed from corporation, unauthorized under corporate by-laws or given under falsified corporate resolution
Deed from partnership, unauthorized under partnership agreement
Deed from purported trustee, unauthorized under trust agreement
Deed to or from a “corporation” before incorporation, or after loss of corporate charter
Deed from a legal nonentity (styled, for example, as a church, charity, or club)
Deed by person in a foreign country, vulnerable to challenge as incompetent, unauthorized, or defective under foreign laws
Claims resulting from use of “alias” or fictitious name style by a predecessor in title
Deed challenged as being given under fraud, undue influence, or duress
Deed following nonjudicial foreclosure, where required procedure was not followed
Deed affecting land in judicial proceedings (bankruptcy, receivership, probate, conservatorship, dissolution of marriage) unauthorized by court
Deed following judicial proceedings subject to appeal or further court order
Deed following judicial proceedings where all necessary parties were not joined
Lack of jurisdiction over persons or property in judicial proceedings
Deed signed by mistake (grantor did not know what was signed)
Deed executed under falsified power of attorney
Deed executed under expired power of attorney (death, disability, or insanity of principal)
Deed apparently valid, but actually delivered after death of grantor or grantee, or without consent of grantor
Deed affecting property purported to be separate property of grantor, which is in fact community or jointly owned property
Undisclosed divorce of one who conveys as sole heir of a deceased former spouse
Deed affecting property of deceased person, not joining all heirs
Deed following administration of estate of missing person who later reappears
Conveyance by heir or survivor of a joint estate who murdered the decedent
Conveyances and proceedings affecting the rights of service member protected by the Service-Members Civil Relief Act
Conveyance void as in violation of public policy (payment of gambling debt, payment for contract to commit crime, or conveyance made in restraint of trade)
Deed to land including “wetlands” subject to public trust (vesting title in government to protect public interest in navigation, commerce, fishing, and recreation)
Deed from government entity, vulnerable to challenge as unauthorized or unlawful
Ineffective release of prior satisfied mortgage due to acquisition of note by bona-fide purchaser (without notice of satisfaction)
Ineffective release of prior satisfied mortgage due to bankruptcy of creditor prior to recording of release (avoiding powers in bankruptcy)
Ineffective release of prior mortgage or lien, as fraudulently obtained by predecessor in title
Disputed release of prior mortgage or lien, as given under mistake or misunderstanding
Ineffective subordination agreement causing junior interest to be reinstated to priority
Deed recorded but not properly indexed so as to be locatable in the land records
Undisclosed but recorded federal or state tax lien
Undisclosed but recorded judgment or spousal/child support lien
Undisclosed but recorded prior mortgage
Undisclosed but recorded notice of pending lawsuit affecting land
Undisclosed but recorded environmental lien
Undisclosed but recorded option, or right of first refusal, to purchase property
Undisclosed but recorded covenants or restrictions, with (or without) rights of reverter
Undisclosed but recorded easements (for access, utilities, drainage, airspace, views) benefiting neighboring land
Undisclosed but recorded boundary, party wall, or setback agreements
Errors in tax record (mailing tax bill to wrong party resulting in tax sale, or crediting payment to wrong property)
Erroneous release of tax or assessment liens, which are later reinstated to the tax rolls
Erroneous reports furnished by tax officials (not binding local government)
Special assessments which become liens upon passage of a law or ordinance, but before recorded notice or commencement of improvements of which assessment is made
Adverse claim of vendor’s lien
Adverse claim of equitable lien
Ambiguous covenants or restrictions in ancient documents
Misinterpretation of wills, deeds, and other instruments
Discovery of will of supposed intestate individual, after probate
Discovery of later will after probate of first will
Erroneous or inadequate legal description
Deed to land without a right of access to a public street or road
Deed to land with legal access subject to undisclosed but recorded conditions or restrictions
Right of access wiped out by foreclosure on neighboring land
Patent defects in recorded instruments (for example, failure to attach notarial acknowledgment or a legal description)
Defective acknowledgment due to lack of authority of notary (acknowledgment taken before commission or after expiration of commission)
Forged notarization or witness acknowledgment
Deed not properly recorded (wrong county, missing pages or other contents, or without required payment)
Deed from grantor who is claimed to have acquired title through fraud upon creditors of a prior owner
Deed to a purchaser from one who has previously sold or leased the same land to a third party under an unrecorded contract, where the third party is in possession of the premises
Claimed prescriptive rights, not of record and not disclosed by survey
Physical location of easement (underground pipe or sewer line) which does not conform with easement of record
Deed to land with improvements encroaching upon land of another
Incorrect survey (misstating location, dimensions, area easements, or improvements upon land)
“Mechanics’ lien” claims (securing payment of contractors and material suppliers for improvements) which may attach without recorded notice
Federal estate or state inheritance tax liens (may attach without recorded notice)
Preexisting violation of subdivision mapping laws*
Preexisting violation of zoning ordinances*
Preexisting violation of conditions, covenants, and restrictions affecting the land*