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What is Title Insurance?

Home Insurance

Most people’s largest financial responsibility will be to purchase a home. In fact, house ownership is seen as a critical component of wealth creation. Many of you may be confronted with terminology and practices you have never heard of during the house purchasing process, particularly if you are a first-time home buyer. In Florida, your closing will be performed by a title insurance agent or attorney accompanied by a notary. In addition to ensuring that title insurance is bought, your title insurance agent or attorney will manage the full closing process if necessary. The first step to getting title insurance of course would be closing the deal. The title to real estate is transferred from the seller to the buyer during the closing process. This procedure normally includes gathering the necessary finances and completing all essential documents. 


What exactly is title insurance and why do I need it?

Title insurance protects you or your lender from any previous rights or obligations to the estate that other individuals may have, as well as title clouds and liens against the property based on some kind of unpaid debts of previous property owners.  A title cloud is a type of title defect that can block or hinder the transfer of the property, it can arise – for instance – from unforeseen issues such as third-party ownership or inaccurate information in the public records. Although most title clouds may be revealed during the course of a title search, some may not be revealed at all. Purchasing owner’s title insurance may protect a property buyer against such issues and guarantee a clear and marketable title when buying a property in Florida.

A lien is a legal claim against assets such as real estate. When someone fails to pay their debt, a creditor may file a lawsuit to place a lien against the debtor’s property. This often leads to confusion and distress when owners find out there is an outstanding debt that they have no knowledge of, due eventually to a clerical error where it was linked to an incorrect name. Under the umbrella of a solid owner’s insurance policy, buyers can avoid these stressful situations by protecting their investment from falling into foreclosure. Title insurance is based on a search of public records, which is then examined to determine the status of the title at the time of purchase. There are two sorts of title insurance policies: lender’s policies and owner’s policies.


Lender’s Policy insures the lender’s interest in the title to your home as well as provides protection to the person or firm that loaned the money to the new owner. On the other hand, an Owner’s Policy will ensure you as the property owner against the specific kinds of claims listed in such policy. 


Title Agents

In Florida, you have the right to choose the title agent or attorney of your liking, but of course, you can always choose the person who is suggested by your real estate agent. Title agents are not fixed to just one company, they may represent many companies at the same time as well. 


The role of the title agent is:

  1. Verify all property documents.
  2. Conduct property search and examine property title. 
  3. Working on closing documents.
  4. Prepare and issue title insurance.
  5. Record all legal documents and conduct closing.


How to select the perfect agent for you

  1. Always ask the people around you for their opinions or recommendations of someone they worked with before. If they were satisfied with their title agents they might give a referral. 
  2. Ask your real estate agent as well as the lender, in many cases, they will recommend more than one title agency where they have worked before and might have referrals as well. 
  3. Always important to contact more than one agency to make sure you are getting the best costs and services. The state of Florida is responsible for setting the Title Insurance Premiums, however, the agent’s portions can be negotiated. This is the cost you should compare with the different agencies.
  4. Make sure the agency you are thinking of working with are considering is licensed. 
  5. Finally, the most crucial part to consider is their experience and their reputation. If you have the possibility to talk to someone who has worked with them do it and make sure the agency you chose is the best one you could choose. 


Our Best Tips For You

  • Make sure to always read well what your title insurance does and does not cover before you go through with the process.
  • If you are thinking about working with the agency that your realtor is recommending, make sure to ask them if they have any financial compensation or financial interest in the agency. Always make sure you are getting the best possible and not just a recommendation because it suits them.
  • ALWAYS read everything you are signing and make sure you understand everything you are signing, if there is something you do not understand don’t be afraid to ask.
  • Negotiate, if possible, and talk to different agencies in order to get the best prices. Make sure to always remember that the closing costs are always negotiable.


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