Title Settlement and Escrow Services
847-227-5112

 

Frequently Asked Questions:

  1. Why do I need a title search?
  2. What’s involved in a title search?
  3. How long does it take to perform a title search and prepare for settlement?
  4. Why do I need a location survey?
  5. Why do I need title insurance?
  6. How much does a settlement cost?

WHY DO I NEED A TITLE SEARCH?

If you’ve decided to purchase a home and hope to take possession as soon as possible, and all financial arrangements have been met, there is one important detail remaining before the transaction can be closed, A TITLE SEARCH MUST BE MADE.

A Title Search is the process of determining from the public records what rights there are to the property, and who owns them.  A title search is a means of determining that the person selling the property has the right to sell it and that the buyer is getting all the rights to the property that he or she is paying for.

WHAT IS INVOLVED IN A TITLE SEARCH?

Chain of Title – A history of ownership, usually starting 60 years back and going forward to the present owner.   We’re determining who bought and sold the property over the years, and if there are any open liens, such as Mortgages, Deeds of Trust, etc.

Tax Search – To determine present status of real estate taxes.  A Lien Certificate from the County of City will reveal whether any taxes are open and due from previous years.

Judgment and Name Search – To determine if there are any unsatisfied judgments, federal or state income tax liens, mechanics liens, etc. against the seller or prior owners over the last 12 years.

HOW LONG DOES IT TAKE TO PERFORM A TITLE SEARCH AND PREPARE FOR SETTLEMENT?

Generally we like to allow at least one week for the examiner to perform the search, submit a report, examine it and review it for liens and judgments.  The more time we have to prepare, the faster we can resolve problems and perform the settlement.

However, there are times when you are in a RUSH.  Please let us know, and we will do our best to get the title work done in a day or two.

WHY DO I NEED A LOCATION SURVEY?

Location Surveys are necessary on all financed purchases.  The Title Company must order the survey through a licensed Surveyor in advance of the settlement to make sure there are no discrepancies or structures on the property which appear to encroach over building restriction lines, property lines, or drainage and utility easements.  Boundary surveys are much more involved, more time consuming and much more expensive.  They are not required by banks unless the property is being rezoned or subdivided, or there’s a boundary problem.

If you are refinancing a loan and have a prior location survey, and have not changed anything or added any improvements, then the old survey is sufficient as long as you sign an affidavit at closing.  Even if you can’t find your survey, we can still insure the title to the lender if you sign the affidavit.   However, some lenders may require that you have a new survey.  In that case, we will contact you about ordering one.

WHY DO I NEED TITLE INSURANCE?

Owners Rights to Property
If you are purchasing a condominium, a home or any other type of building, or even vacant land, you must have a complete Title Search made on the property.  Because real estate has such great value, there are many special laws which have been enacted for its protection.  As a result, the owner of land has exceedingly strong rights, as do his family and heirs.

Liens on Property
There may be others who have rights in the property – Banks and lenders who have secured the property with outstanding mortgages,  local city or county governments who are due unpaid property taxes, and even contractors who have lien claims to whom the owner owes money for work that was completed and not paid.  The property may be sold without their knowledge, but the claim is still good until satisfied.

If there are problems found after a thorough title search which stand in the way of a clear title, it is up to the owners and their attorneys to clear them up before settlement.  Although a title search is based on public record, it may not show everything which could affect the title to the property.  Below are some of the hidden risks or clerical mistakes which could seriously endanger the title.

Hidden Risks
Marital Status of Owner Incorrectly Given – An owner may claim that he or she is single or divorced in another state, resulting in a claim by a spouse or former spouse.

Undisclosed Heirs – If an owner dies without a will, the courts must decide who the rightful heirs are.  But such a decision may not be final or binding on any heir who was not notified of the proceeding.  Even under a will, the court may have to settle questions or interpretation of the will as to heirs overlooked due to incorrect probate proceedings.

Mental Incompetence or  Minors – A transfer of a property by a minor or a person adjudged to be mentally incompetent raises special problems.  To be valid and binding on a minor or incompetent, the transaction must be made by guardians or appointed by the court.  If a Deed or release was executed by a person who was a minor or under mental disability at the time, the transaction may be voidable or invalid.

Fraud and Forgery – The owner may have been fraudulently impersonated.   Deeds, releases or other documents may be forgeries.

Defective Deeds – A Deed may have been delivered without consent of the owners or after his or her death.  A document may have executed by a Power of Attorney that has expired, or an officer of a corporation may not have been properly empowered to act as signer of the Deed.

Confusion due to Similar or Identical Names – Despite a careful investigation to prevent it, some confusion of identity is possible, especially where names are similar.  For instance, there are many common names such as Jones, Johnson, Smith or Williams.  Also, two members of the same family might have the same name, as in the case of father and son, and the title may be in one while the Deed is executed by the other having no title.

Errors in Records of Clerical Work – A document may be missed in searching, or may be misindexed in the Land Records.  Clerical mistakes are infrequent, but they do happen.

Title Insurance Protects Against these Risks
You are protected against these risks and insured against loss.  If your title is ever questioned or disputed, the title insurance company stands ready to defend it in two ways:

  1. If it is necessary to enter a legal defense of your rights under the policy in any lawsuit or proceeding adversely affecting the title as insured, the title insurance company employs legal counsel to take such action for you, completely at their expense.
  2. If a loss is sustained, you are protected up to the full amount of your policy, which is usually equal to the full purchase price you paid for the property.

Lenders Title Insurance Is Not Enough
A lender who has a large security interest in the property requires that you, the borrower/buyer purchase a title policy to assure the lender that the mortgage is a valid first lien, and that the lender can be certain about the title in the event of foreclosure. However, this policy does not benefit the owner in the event of a claim.

HOW MUCH DOES A SETTLEMENT COST?

Title Settlements costs can vary depending on the amount of research necessary to pass clear title, but there are common costs to all settlements, including Title Search, Title Exam, Title Binder, Settlement Fee, Title Insurance and any other variables. For a quote of our services, please contact us. We will be happy to prepare a FREE quote for you.

Buyers click here.  Brokers and Lenders click here.

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