At Family Resolutions, we collaborate with you, your real estate agent and mortgage company along each step in the process to ensure completion of your real estate transaction.
We take the necessary steps to transfer the ownership of a house or commercial property under applicable law. If you are working with a real estate agent, we are available to review your purchase and sale agreement before you sign it. If you are not working with an agent, we will draft the contract ourselves and negotiate on your behalf. We offer guidance throughout due diligence, financing, and inspection stages of the contract.
If you are buying, we examine the title to the prospective property and explain any encumbrances or rights you may have with respect to the property. We prepare all the closing figures and adjustments and explain everything to you at the closing, including your loan documents.
In a sale, we prepare all the closing figures and adjustments. We draft the deed and conveyance tax statements. We take the necessary steps to insure your mortgage will be paid off and released properly. We work hard to successfully and timely close the transaction.
At Family Resolutions, we have the experience necessary to ensure that your real estate transaction goes smoothly and that you are protected throughout the process. We offer dedication and personal attention to all manner of real estate related issues including:
- Buy-sell agreements
- Drafting deeds
- Short sales
- Tax re-evaluations
Why You Need An Attorney
Before a residential real estate transaction is completed, it should be thoroughly reviewed by someone who has the legal background to notice when something isn’t right. If an error or unfair stipulation slips through the cracks, it can be extremely problematic down the road.
Our lawyers and staff members have years of experience and a keen attention to detail. We stay up-to-date on current real estate practices, so we know when a contract is poorly written and how to recognize even minor defects. We will help protect your best interests no matter what real estate transaction you are dealing with.
BREAKING DOWN ‘Title Insurance’
Title insurance protects both real estate owners and lenders against loss or damage occurring from liens, encumbrances, or defects in the title, or actual ownership of, a property. Unlike traditional insurance, which protects against future events, title insurance protects against claims for past occurrences. Such claims include property ownership by another person, fraud or forgery of the title documents, unidentified easements, outstanding lawsuits, liens against the property, et al.
Purchasing Title Insurance
An escrow or closing agent initiates the insurance process upon completion of the property purchase agreement. There are five major U.S. title insurance underwriters, of which the agent or attorney typically recommends one.
There are two types of title insurance: lenders’ insurance and owners’ insurance. Almost all lenders require the borrower to purchase a lender’s title insurance policy to protect the lender in the event the seller was not legally able to transfer the title of ownership rights. A lender’s policy only protects the lender against loss. An issued policy signifies the completion of a title search, offering some assurance to the buyer.
Since title searches are not infallible and the owner remains at risk of loss, there is a need for additional protection in the form of an owner’s title insurance policy. Owner’s title insurance, often purchased by the seller to protect the buyer against defects in the title, is optional.
Often, a lender’s policy and an owner’s policy are required together to guarantee everyone is adequately protected. At closing, the parties purchase title insurance for a one-time fee. To prevent abuse, the Real Estate Settlement Procedures Act (RESPA) prohibits sellers from requiring purchase from a specific title insurance carrier.
Risks of No Title Insurance
Having no title insurance exposes transacting parties to significant risk in the event a title defect is present. Consider a homebuyer searching for the house of their dreams only to find, after closing, unpaid property taxes from the prior owner. Without title insurance, the financial burden of this claim for back taxes rests solely with the buyer. They will either pay the outstanding property taxes or risk losing the home to the taxing entity. Under the same scenario with title insurance, the coverage protects the buyer for as long as they own or have interest in the property.
Title Insurance Policies
Why Insure the Title to Your Home?
When you buy a house, you’re buying more than the structure and the property it sits on. You are also buying its legal history, as it is identified in the title. If there’s a problem with the title that was never uncovered during the closing, such as a lien on the property, that problem is now yours.
The Role of Title Insurance
Title insurance insures parties against loss resulting from matters affecting the title to real property. Title insurance companies evaluate the history of the property and insure that nothing in the history of the title will result in a loss to the insured. Unlike other forms of insurance, title insurance is paid for by a single, one-time premium at the time the property is acquired.
Title Insurance for Your Lender vs. Title Insurance for You
Most mortgage lenders require people to purchase a title insurance policy in the lender’s name. That policy is called the Mortgagee Policy and it is required to insure the validity of the mortgage as a lien on your property. But the policy you buy for the lender does not protect you. Owners desiring title protection must purchase a separate policy insuring their interests. The title insurance policy you buy for yourself is the Owner Policy.
The Standard Owner Title Insurance Policy:
Covering the Basics.
The standard Owner Policy in use today was developed by ALTA, the American Land Title Association. It provides basic coverage for those who want to protect their interest in the property they purchase. The rate for your Owner Policy is usually higher than what you’d pay for a Mortgagee Policy because of the risk involved – Owner Title Insurance covers the value of your interest in the property as opposed to the value of just the loan.
Specifically, it insures that:
- You are the true, legally recognized owner of the property.
- There are no defects, liens, or encumbrances other than those that have been identifed and listed in the title insurance policy.
- You can sell your home to another buyer without being rejected because of a defect in the title you were unaware of when you purchased the policy.
- You have a legal right to access your property from a public street – or a privately owned point of access.
- If your title is challenged, the insurer may defend your title. And costs, attorney’s fees, and expenses associated with that defense will be covered by the insurer.
- The dollar amount of your coverage will automatically increase 10% each year for the frst fve years of its life – without any additional cost to you.
The Owner Policy provides coverage not just for the time you own the property, but for as long as you might be liable to any future owner. If a new owner makes a legal claim against you within the coverage of your title insurance policy, you’d be covered for the same protections listed above.
That’s an overview of the Standard Policy, but because owning real estate can expose you to a wide range of legal issues, an Expanded Protection Owner Policy is available as well.
The Expanded Protection Owner Title Insurance Policy
More Coverage for Owners of Improved Residential Property.
When you’re purchasing a home, you have an additional option of purchasing an Expanded Protection Owner Policy. The Expanded Protection Owner Policy provides all of the coverage in the Standard Owner Policy but also provides coverage against loss if:
- Anyone makes an ownership claim based upon a forged deed after you buy the property.
- Someone else claims they have a right to your land, or can limit the way you use it, after you buy the property.
- You cannot use your house as a single-family residence.
- You do not have actual pedestrian and vehicular access to your property.
- Someone claims they own your land as a result of a violation of a recorded covenant or restriction that occurs before you acquire the property.
- You are prevented from obtaining a building permit to build an addition because of an existing violation of a subdivision law, or you are ordered to correct the violation.
- You are forced to remove a structure presently on your property because of an existing zoning violation, or you are ordered to correct the violation.
- You are forced to remove or remodel the existing home or another building on your land, because any portion of it was built without obtaining a necessary building permit.
- You are forced to remove an existing structure on your property because that structure encroaches onto your neighbor’s land, into an easement or across a building set back line.
- Your home is damaged by someone utilizing an easement.
- After you buy the property, your neighbor builds a house or some other building that encroaches onto your land.
- You cannot sell your home because of an existing violation of a subdivision law.
In addition, choosing the Expanded Protection Owner Policy allows you to obtain survey coverage in certain cases without having to pay for a survey of the property. With survey coverage, you are covered for undisclosed title defects that a survey of the property would otherwise reveal, such as rights of way, encroachments, and even boundary disputes. Adding survey coverage allows you to maximize the coverage available under the Expanded Protection Owner Policy.
The Case for Title Insurance
The issues outlined in this brochure explain why title insurance is important from a legal standpoint. But there’s another, equally important reason for purchasing a title insurance policy: peace of mind. With title insurance you can feel secure, knowing that you’re protected from unforeseen circumstances.
Ask Your Attorney
Real estate transactions can be complicated, time consuming, and may involve some degree of risk. With Family Resolutions at your side, you can stay both informed and protected. That’s why your attorney is such a critical part of the process.
When it’s time to buy or sell real estate, give Family Resolutions a call.