Title Tips for Buyers and Sellers
What is a Title?
Title is the legal evidence, or right, that a person has to ownership and possession of land. It is possible that someone other than the seller has legal right to the property you're buying. If that right can be established, this person can claim the property outright or make demands on the owner for its use.
What Can Make A Title Defective
There can be any number of problems that remain undisclosed even after the most careful search of public records. These hidden "defects" are very dangerous and sometimes are not discovered for months, even years after you purchase your home. You might be forced to spend a substantial amount of money on a legal defense, and still result in the loss of your property.
Title Insurance provides protection from these hidden defects. The list of defects goes on and on, but here are a few examples:
- Deeds from minors or non-existent entities
- Creditor claims
- A defective Title
- Easements by prescription not discovered by a survey
- Errors in tax records
- Duress in execution of documents
- Undisclosed heirs
- Federal, state inheritance gift tax liens
- Mistaken interpretation of wills and trusts
- Deeds executed under the false or expired powers of attorney
Title insurance protects your investment. It will protect you from financial loss caused by Title problems. Title insurance is a one-time premium that provides all the coverage you need to protect your investment.
Two Types of Title Insurance
There are two (2) types of Title Insurance: a Lender's Policy and an Owner's Policy. When you have a mortgage on the property the lender will very likely require that you purchase a Lender's policy. This Lender's Policy only insures that the financial institution has a valid, enforceable lien on the property. A Lender's Policy does not protect you, the home owner.
An Owner's Title Policy on the other hand is designed te odat protect you, the owner, from title defects that existed prior to the issue of your policy. It also covers the full cost of any legal defense of your Title. When you purchase an Owner's Policy, a Lender's Policy is also issued at no additional cost.
This one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time expense, paid only when you purchase your home, yet it continues to provide complete coverage for as long as your or your heirs own the property.
When should you purchase Title Insurance?
When you and the seller sign the contract agreement to transfer ownership of the property, provide a copy and a brief summary of the details to your Closing Agent. He or she will get the ball rolling and begin the search process, etc. Our Closing Agent will take a number of steps to make certain that he or she knows as much as possible about the Title, etc.
It is always the buyer and sellers right in the state of Missouri to select the title company of their choice