So What is Title Anyway?

Typically you’ll have 7 days from the date you go under contract to place your title order. We have several preferred title companies who we work with often who we are happy to suggest; title insurance rates are regulated across the industry, but you can also research and choose your own title service provider if you prefer. No matter what you choose, we’ll place the title order on your behalf and work closing with your title processor to bring your file all the way to closing.

So what is “title” anyway?

In real estate, we tend to use the term pretty broadly, but what we mean by “title” can be broken down into two main components.

1. Title Search

Regardless of the details of your purchase, whether you’re paying cash or obtaining a mortgage, buyers are required to obtain a title search on the property.

Once the title company receives the search results they review and compile the findings into a preliminary title commitment, which is shared with all transaction parties. The preliminary title commitment shows the current and past ownership of the property, any mortgages, liens, or judgments (against the buyer or seller), taxes, utilities, references to estates, deed restrictions, and conditions.

The report itself is lengthy, but your real estate agent will be able to review it with you and let you know if any items are outside of the norm and what action is required by you.

Rest assured, the title will be cleared before closing, and the property will transfer to you free and clear of any judgments, liens, and mortgages. We’ll work with the title company and listing agent to clear any “clouds” that appear on titles, such as judgments or liens, and the seller’s conveyancer will work to provide payoffs for routine items like utilities and mortgages. The seller’s conveyancer will also procure the townships “U&"O” (Use and Occupancy Certificate) as part of their process, which you will receive a copy of prior to closing.

As the buyer, you are also responsible for clearing any judgments that arise against you personally before you can take the title on your new property.

Deed restrictions and conditions will remain with the property even after closing. The most common restrictions we see are related to shared party walls, driveway easements, and utility access, however, more restrictive examples do exist, so be sure your agent has thoroughly reviewed the report with you.

Hey, why is the “commitment date” earlier than my agreement of sale date?

Good Question! The commitment date actually has nothing to do with your transaction, it’s simply the date the county records were last updated. In order to be considered reliable, title records need to be updated every 6 months. So if too much time elapses between when you receive your preliminary title commitment and closing, the title company will order and provide a “bring down” and issue an updated title commitment showing any changes before closing.

2. Title Insurance

Not to be confused with the title search, title insurance provides coverage for title defects not uncovered in the preliminary title search. A lender will require you to obtain title insurance for the entire amount of the mortgage you receive, however, for the portion of your purchase that is covered by your down payment or for cash purchase, title insurance is not technically required. However, we strongly, strongly recommend you take advantage of it and elect to purchase an “owner’s policy.”

Unlike other insurance premiums, title insurance is a one-time cost, paid at closing.

Standard or Enhanced Title Insurance Policy - What’s the difference?

A standard policy covers the basics: someone else owns interest to your title, forgery, documents signed or recorded incorrectly, restrictive covenants, and unmarketable title.

An enhanced policy is much more comprehensive and includes coverage for appreciation in property value, encroachments, easements, zoning, subdivision, and building permits violations to name a few.

The best way to determine what is right for you is to request a quote for each from your title company to compare side by side.

After your closing is complete, your realtor will provide you with a “marked up” title from closing, which shows what the title company is agreeing to underwrite. You’ll later receive the actual owner’s policy directly from the title company, reflecting this coverage. Be sure to keep both on record as they may be needed in the future, especially when you are ready to sell the property.

It may seem like a lengthy process, but rest assured, we’ll walk you through every step.

If you have any questions or would like to get started on your home purchase, schedule an appointment with us, as your first step.

Talk to you soon!