Title Insurance Explained

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Centuries ago, in order to purchase a piece of land, you would need a hand shake, local currency, and hand written documentation to prove ownership of your property. Basically, it’s what we call “a deed.” Today, there are so many items and jargon, it can get confusing really fast. Thankfully, we have Title Insurance agents who can help explain it all and walk us through the process of paperwork, digital certificates, government regulation, and the keys in hand moment.

Title Insurance agents protects your rights as home buyers. Which means, they run searches through various data centers through a process called Title Search. In the process of identifying the property being transferred, a Title Search will produce a full and complete report, which will include: abstracts, deeds, mortgages, municipal and mechanic liens, judgements, public notices, easements, restrictions, covenants, and more.

This is called the title report. The title report is then captured into a universally accepted document called a title commitment and acts as a final checklist of items that need to be paid off in full – as well as items that will not be covered by the insurance policy in place. The title commitment will also confirm all of the ownership of the property from past to present.

When title commitment is issued, the final process (which differs from state-to-state) is called settlement, close of escrow, or closing. Before the final process, the title insurance company confirms all of the amounts being paid off, as well as confirming with all parties for their fees that may or may not be on public records, as well as real estate commissions or lender fees. All financial figures and documentation is then prepared as required state-to-state prior to the transferring of property from seller to buyer.

The home buying process may seem simple and straightforward. However, the title company is responsible for millions and hundreds of thousand dollars and client sensitive data every single day. The risk of financial mistakes, also known as a “system error” is where the insurance premium that you pay covers and keeps you safe.

Work with a title insurance agent and company who are experienced and knows the complete process. New Door Title Insurance company will protect your property rights and can walk you through the process. Contact us and get a quote today.

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