FAQs

What is an Abstract? – An abstract is a history of the title to a particular tract of land. It is not a title! It consists of a summary of recorded instruments affecting the title of the real estate in the county where the property is located. The abstract may be correct but the title to the property can still be flawed. The abstract is not a guarantee. It is only a summary of what has been recorded. It does not judge the correctness of any item it lists. It merely reports what is on the record.

What is Title Insurance? – Title to real estate is the evidence of the right which a person has to the ownership and possession of land. A defect in that title is a possible legal right held by someone other than the owner to claim property or to make demands on the owner of that property. Title insurance is a contract with a title insurance company to protect an owner against losses arising through defects in the title to real estate. If the title is insurable, the title company guarantees the owner against loss due to any defect in title or expenses in legal defense of the title as provided for in the title insurance policy.

Why Proof of Title? – When you buy a house, the burden to provide clear title is usually the responsibility of the Seller. The lender will not give you a mortgage until you can prove that the present owner of the house legally owns it or has title to it.

Owner’s Policies and Lender’s Policies – A lender will often require title insurance for the their protection.  Such a policy does not protect the owner. To protect themselves against possible title defects an owner should purchase a separate Owner’s Policy of Title Insurance on the property.

Why buy Title Insurance? – When a person buys a car or consumer goods, they seldom need to know whether the former owner is married, single, divorced; whether they have paid their taxes or are involved in a lawsuit. But when a person buys real property, it is necessary to have all that information and much more. A competent investigation can uncover such items as unpaid taxes, easements, restrictions and more. All items affecting the title are not contained in a single book, in a single office or even in the same city. For these reasons and many more, a property owner needs the protection afforded by title insurance.

What does Title Insurance Cost?  – The cost of an Owner’s Policy of Title Insurance is directly related to the appraised value or sales price of the property. The higher its value, the more coverage is needed. The premium is paid only once and the title policy remains in force for as long as the property is owned by the insured and continues to protect the insured during ownership of the property. The premium or costs to insure are small compared to the total purchase price.  A Loan Policy of Title Insurance is issued in the amount of the loan, and liability decreases as the mortgage debt is reduced and therefore the cost of a Loan Policy of Title Insurance is less than an Owner’s Policy of Title Insurance.