Frequently Asked Questions

What is title insurance? 

It is an insurance policy that protects the insured against loss should the condition of title to the land be other than as insured. Unlike other types of insurance that offer protection against future possible occurrences, title insurance offers protection against past occurrences which could result in a claim at a future date. Coverage continues in effect for so long as you have an interest in the covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property. Title insurance provides the insured with "peace of mind" in knowing that you are receiving good and meritable title to the real estate you are purchasing.

Why do I need title insurance? 

When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership...to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights. Without an owner's title insurance policy, you may not be fully protected against errors in the public records, hidden defects not disclosed by the public records, or mistakes made during the examination of the title of your new property. As a result, you may be held fully accountable for any liens, judgments or claims brought against your new property. However, your owner's title policy insures that if such an occasion arises, you will be defended, free of charge against all covered claims and paid up to the amount of the policy to settle valid claims.

What is a title search?  

A title search is a thorough review or examination of the public records that pertain to real property ownership and the rights/limitations of its use. The search period begins with the current owner(s) and extends back in time for a period of 60 years (commonly referred to as the "chain of title"). All documents affecting the subject property are reviewed for accuracy, completeness and proper execution. Similarly, all owners of record during the search period are indexed to determine their ownership interests, marital status and legal and mental capacity to enter into a contract to sell/buy real property. All conveyances must have been properly conducted and approved by the appropriate governmental departments.

What issues can a title search reveal?  

A title search can show any number of title defects, liens, and other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against buyers/sellers and any restrictions or conditions limiting the use of the land.

Are there any issues a title search may not reveal?  

Yes. There are some "hidden hazards" that even the most diligent title search may not reveal. For instance, a previous owner could have incorrectly stated his marital status resulting in a possible claim by his legal spouse. Other hidden hazards include fraud, forgery, defective deeds, mental incompetence, confusion due to similar or identical names, and clerical errors in the City/County land records. These defects can arise after you've purchased your home and can jeopardize your right to ownership in part or full.

What is a HUD-1 Settlement Statement? 

This is a summary of the financial portion of the real estate transaction. The title company or closing agent is required by the Department of Housing & Urban Development to use the HUD-1 on virtually all one-family to four-family residential real estate transactions involving a lender. The statement will list the purchase price, loan amount, closing costs for the buyer and seller, and will show all sums being charged and disbursed to the parties involved. It also clearly summarizes the total amount due from the purchaser.

What does title insurance cost? 

The cost varies, depending mainly on the value of your property. The important thing to remember is that you only pay once, then the coverage continues in effect for so long as you have an interest in covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.

If I have a problem, will I lose my property to make a claim? 

Not at all. At the mere hint of a claim adverse to your title, you should contact your title insurer or the agent who issued your policy. Title insurance includes coverage for legal expenses that may be necessary to investigate, litigate, or settle an adverse claim.

If my lender obtains title insurance, why do I need it?  

The lender's policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender's ability to foreclose and recover its principal and interest. And in the event of a claim, there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner's policy is a bargain.

What types of risks are covered by title insurance? 

Standard Coverage addresses such risks as:

• Forgery and impersonation
• Lack of competency, capacity or legal authority of a party
• Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner)
• Undisclosed (but recorded) prior mortgage or lien
• Undisclosed (but recorded) easement or use restriction
• Erroneous or inadequate legal descriptions
• Lack of a right of access
• Deed not properly recorded

First American's Eagle Policy covers all of the above risks plus:

• Off-record matters, such as claims for adverse possession or prescriptive easement
• Deed to land with buildings encroaching on land of another incorrect survey
• Silent (off-record) liens, such as mechanic's or estate tax liens
• Pre-existing violations of subdivision laws, zoning ordinances or CC&R's (Covenants, Conditions & Restrictions)
• Post-policy forgery
• Forced removal of improvements due to lack of building permit (subject to deductible)
• Post-policy construction of improvements by a neighbor onto insured land
• Location and dimensions of insured land (survey not required)

The information above was provided by First American Title Insurance Company

Do I need a property survey? 

Our title insurance company does not require a property survey in most circumstances. However, your lender may require a survey of the property. We recommend you obtain a property survey if you plan to add a fence or other structures on the property.

What to bring to closing? 

You should bring a photo ID to closing. Documents will be notarized at closing. The notary public will need to see your photo identification. Must have certified/cashier's check for closing payable to "Elite Settlements, Inc." for any funds due at closing (you may have your funds wired - please contact our office for instructions).

When will I receive my proceeds? 

Once settlement is complete and all documents have been recorded, your proceeds check can be mailed or picked up. We do not issue certified checks. If you would like to have your funds available immediately, we recommend a wire transfer. You must let us know at closing, if you would like your funds wired. There will be a wire fee of $15 included on the HUD-1.

How much should my certified or cashier's check be, if the HUD-1 is not ready before closing?  

You should bring a cashier's or certified check for the amount listed on the Good Faith Estimate given to you by mortgage loan officer. If the Good Faith is an overestimate, we will provide you a check for the overage at settlement. If the Good Faith is an underestimate, in most cases we will accept your personal check for the difference.