Before Purchasing a Home, What You Need to Know About Title Services
When purchasing a property, you and your lender want to be certain your ownership rights are never questioned. The closing agent’s responsibility is to search the public records to ensure the title to the property is “marketable.” “Marketable title” means that title is free from defects and therefore allow the property to be transferred to a new owner without title issues. A reputable closing agent will have the experience to discover defects such as unpaid mortgages, liens, judgments and to ensure they are cleared at closing. However, should there be any “hidden defects” in the property’s past such as a fraudulent deed or a clerical error in the public records, a title insurance policy can protect you. Unlike many other insurance policies, you only pay for title insurance once and are protected for as long as you own the property.
There are several types of title insurance but the two most common are the Owner’s and the Lender’s policies. The Owner’s policy protects the owner of the property for losses up to the value of the purchase price of the property while the Lender’s Policy protects your lender for losses up to the value of their loan. Your purchase and sale contract should provide for a deadline to obtain a Title Insurance Commitment from a Florida licensed title insurer. The Title Insurance Commitment will list the terms, conditions and exclusions that will be in your title insurance policy after closing. It is imperative that you choose the right company to act as your closing agent to avoid unnecessary problems later on.
A reputable closing agent will ensure that all conditions are listed on the Commitment and satisfied at or before closing. Choosing a closing agent with minimal experience could lead to the treatment of an unmet condition as an additional exception to the policy; meaning, no coverage will be provided. In addition, a reputable closing agent will ensure you understand the exclusions from coverage which are contained in your policy so you can object to the unacceptable ones in a timely matter before closing. Examples of common exclusions are open permits and issues that would have been discovered by having the property surveyed. Further, your closing agent should delete all “standard exceptions” by demanding the necessary documentation from the seller to do so.