What is a title?
The title to a piece of property is the evidence the owner is in lawful possession of the property.
The title to a piece of property is the evidence the owner is in lawful possession of the property.
Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or the defects in the title to the property. Each title insurance policy is subject to specific terms, conditions and exclusions.
Insurance such as auto, life, health, etc., protects against potential future events and is paid with monthly or annual premiums. A title policy insures against events that occurred in the past of the real property and the people who owned it, for a one-time premium paid at the close of the escrow.
Title insurance protects against claims from defects. Defects include: another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items specified in the policy.
Purchasers and lenders need title insurance in order to be insured against various possible title defects. The buyer, seller and lender all benefit from the issuance of title insurance.
After the escrow officer or lender opens the title order, Red Fox Title begins a title search. A title binder is issued to the customer for review and approval. All closing documents are recorded upon the settlements agent’s instruction. When recording has been confirmed, demands are paid, funds are disbursed, and the actual title policy is created.
Escrow refers to the process in which the funds of a transaction (such as the sale of a house) are held by a third party, often the title company or an attorney in the case of real estate, pending the fulfillment of the transaction.
A standard policy insures the new owner/homebuyer, and a lender’s policy insures the priority of the lender’s security interest.