Performing a title search and obtaining title insurance are two common requirements homebuyers encounter, particularly during the mortgage closing process. Simply put, the title is the official document reflecting legal ownership of the property, an in is conveyed as the property is sold over time. Although the completion of the title search and purchasing of title insurance is a standardized process, it can raise important questions about the ownership of your property. But what’s the difference between a title search and title insurance, and how do you know if you need title insurance at all? The skilled real estate attorneys at M&A Law Firm are here to tell you!
What is a Title Search?
If at any point in the property’s history, the title is compromised by a forged or fraudulent deed, a previously undisclosed or unknown heirs with adverse claims on the property, or a simple mistake in the public record, any and all subsequent transfers can be null and void. A title search goes back through the history of the title transfers to see if there are any potential issues regarding the ownership of the property. This process can uncover a lot of information on a property. For example, a title search can lead to information regarding any easements, leases, existing lines of credit, unpaid taxes, or other restrictions.
A title search involves a thorough investigation of the official land records in the area for all records of conveyances, foreclosures, leans, taxes, or any other documents reflecting what may have happened in the legal history of the property. Title searches can uncover deeds , mortgage documents, lean documents, or other issues that could affect the sellers ability to convey clear title to the real estate property. Typically, title searches are performed by professionals based on the standards developed by the American Land Title Association.
During a real-estate transaction – typically during closing or as part of the mortgage application procedure – the buyer or seller will typically retain a title search company to ensure all documents are in order. The title agency provides an agent to oversee closing processes and provide title insurance if necessary
When Is Title Insurance Required?
Once a company completes a title search, they often will offer title insurance period a title insurance protects your risk of loss associated with problems that arise in the legal title to your property. Title insurance is typically purchased for a one-time payment, and rather than hedging against the risk of future loss like most insurance policies, this feast secure as a safeguard against financial or legal risk arising from defects in land title not detected during the search.
The State of Illinois recognizes two different types of title insurance: owners’ coverage and lenders’ protection. Owners title insurance is usually purchased in the amount of the real estate purchase and it protects against defects and title for as long as he insured and his or her heirs maintain their ownership interest in the property. Most lenders in Illinois require mortgage title insurance as security for the funds they are lending for a real estate purchase. In these cases, title insurance is typically purchased in the amount of the mortgage loan and it decreases as the balance is paid off.
Real estate closing costs can really add up, but fortunately here are several opportunities for savings. For example, title insurance rates and fees are generally negotiable. In Illinois, the state Title Insurance Act allows title companies and their customers to negotiate title insurance rates. Whether the buyer or the seller cover title insurance costs depends upon the nature and circumstances of the exchange, and a real estate attorney can help you negotiate the best possible terms for any title insurance that may be required.
The Benefits of Building a Good Relationship With Title Agents
The best real estate attorneys provide legal advice and guidance in relation to a real estate transaction while also ensuring that the transaction is legal and binding. Real estate attorneys can also handle some of the more stressful aspects of real estate transactions, such as preparing all closing documents and handling the transfer of funds. Real estate attorneys can also work with title companies to complete title searches, write insurance policies, and resolve disputes over the chain of title on a property. Overall, they ensure that all transfers of real estate are carried out in the best interest of their clients – whatever that may entail. But at the end of the day, there’s no replacement for a good relationship with a title agent.
Title searches and insurance are highly specialized, and many homebuyers don’t fully understand what a title company does. Typically, they work with buyers, sellers, surveyors, real estate agents, inspectors, and appraisers to get an accurate ownership and a lien history on a piece of real estate, in addition to identifying other factors that may affect the usability of the property. This profession requires a lot of communication and research, which means a lot of it revolves around who you know. M&A Law Firm has established relationships with top title search agents across the Chicago area. This is particularly true if a title search uncovers any issues or unanticipated circumstances. When this happens, that’s where real estate attorneys – like the skilled lawyers at M&A Law – come in.
Although circumstances vary, most real estate transactions aren’t smooth sailing from start to finish. As a result, it’s critical to have a solid real estate attorney on your side, and it’s best when they have taken the time to build relationships with title agencies. Having both a solid attorney and a great title company rep on your side when dealing in real estate will put you in the best possible position for success.
Most people don’t realize how important it is to have an experienced title company rep on their side when buying and selling property. However, a good relationship with a title company can help you out a lot, particularly in terms of what services they can provide during a real-estate transaction. All in all, having a dependable title company in your corner really helps mitigate your legal liability.
