Frequently Asked Questions What is Title Company? Expand A title company is a business that searches, examines and insures real estate titles. We investigate the public records to verify ownership in real estate and to assure a purchaser or lender that title is free of title flaws that could adversely affect ownership. We search various county, state and federal offices, including the Register of Deeds, County Treasurer, Register of Probate and Clerk of Circuit Courts, along with web sites such as the New York Circuit Court Docket, New York Child Support Lien Docket, the New York Department of Financial Institutions and the Federal Terrorist sites. When title flaws are discovered, we work to clear up these issues, never losing sight of our ultimate mission: to protect the consumer. In addition to performing title research, we also are in the business of closing real estate and loan transactions. Our closers obtain loan pay-offs on existing mortgages, clear judgments, pay or pro-rate taxes, search for special assessments and / or association dues and order all documents necessary to complete the transaction What is Title Insurance? Expand Title insurance searches the public records and to some extent private records and provides a guarantee that there are no undisclosed leins against the subject property. Title insurance is not required by law in order to make a real estate transaction. However all lending institutions do require title insurance. There are two separate title insurance polices. Title Insurance vs. Other Types of Insurance (i.e. Auto Insurance, Home Insurance, etc.)? Expand Title Insurance is risk prevention opposed to other types of insurance which is considered risk assumption. What this means is that when you are insured, normally, they are insuring you under the assumption that something will eventually happen where they will have to insure you and pay for whatever it is that happened. Title Insurance is different in a couple different ways. Since title to a piece of property is traced backwards from the current owner, the past is insured. Future acts from the date of the policy are excluded from coverage; therefore making title insurance a risk elimination insurance. Title insurance also differs as it is a one-time purchase and there are no annual premiums to pay. Why is Title Insurance Needed? Expand The American Land Title Association reports that 36% of all real estate transactions have a defect in title. Title insurance protects against loss or damage against any future claims people may have against your ownership of the property. What is Buyer's Title Insurance? Expand The amount of the buyer's title insurance is based on the amount of the loan. The Title Company is guaranteeing the title to the property to the lending institution, so it is based on the amount of the loan. Why is Title Insurance Important when Refinancing? Expand Why do you need to buy title insurance again even though you purchased a policy when you first bought your home and there is no change in ownership? It's because a separate policy is needed by the lender insuring the validity of your mortgage when it is made. For as long as you own the property your mortgage is valid, but it doesn't insure the new mortgage created when you refinance, and it doesn't provide protection against events that may have transpired between the time you purchased the property and the time it was refinanced. Lenders also insist on a new title policy because many mortgages are packaged as securities and sold to investors in the secondary mortgage market. Title insurance is the only practical pay to provide the assurance that investors demand and ensure that the mortgages backing these securities are valid and enforceable. What Is Seller's Title Insurance? Expand The amount of the seller's title insurance is based on the amount of the sales price of the property to be insured. The Title Insurance Company is guaranteeing the title to the property to the seller in order to protect the seller from liability in case of any cloud on the title to the subject property. Since the loan amount is less than the sales amount, the seller's title insurance cost is normally more than the buyer's insurance cost. What Is The Process of the Title Search? Expand This is a graphical representation of the life of a Title Search. The Title Company does offer other services during the course of the transaction. The Title Company Representatives often provide courier ans other services designed to expedite the escrow process. How Do I To Prepare For A Closing? Expand The buyer and the seller sign a purchase agreement or sales contract. Usually, at this point, the buyer is asked to make a small initial payment, often called an "earnest money deposit," as evidence of intention to buy the property. Then the buyer will apply to a lender for a loan. The amount of the seller's title insurance is based on the amount of the sales price of the property to be insured. The Title Insurance Company is guaranteeing the title to the property to the seller in order to protect the seller from liability in case of any cloud on the title to the subject property. Since the loan amount is less than the sales amount, the seller's title insurance cost is normally more that the buyer's insurance cost. The sales agreement the buyer signed describes the property, states the purchase price, sets forth the method of payment and may name the date and place where the "closing" or actual transfer of the property will occur. This meeting or transaction is sometimes called the "settlement" or " passing of papers." A new deed will be prepared transfering ownership of the property to the buyer. Th lender will require the buyers signature on a document, usually a promissory note, as evidence that they are personally responsible for repaying the loan. Also, the buyer will sign a mortgage on the property as security to the lender for the loan. The mortgage gives the lender the right to have the property sold if the buyer fails to make the payments. Sometimes a "deed of trust" or "security deed" is used instead of of a mortgage, but the legal effect is virtually the same. Before the buyer exchanges these papers, the property may be surveyed, appraised and inspected for termites or other structural problems, and the ownership of title will be checked in county and court records. What is an Abstract? Doesn't it Tell About the Property? Expand An abstract, which is used in some parts of the country, is a history of the title to property as revealed by the public records. Deeds, mortgages, other instruments and legal proceedings which have affected property through the years are all included in the abstract. If something is revealed in the abstract which might stand in the way of a clear title, it is up to the owner and owner's attorney to clear it away. If they cannot do this, it must be accepted as a limitation on your right of ownership. Also, it is not infrequent for matters which seriously affect the title to be omitted in an abstract, because they are not shown in the public records.