What is Title Insurance?
While a homeowner’s policy will protect you against loss from theft or fire and wind damage to your home, your owner’s title insurance policy will protect you from hidden title hazards that threaten your financial investment in your home. Title insurance is unusual in that it protects you from losses caused by errors that may have occurred in the past, while most insurance products protect from losses incurred if something happens in the future.
A title search does due diligence during any property transaction, but mistakes can be made and things can be missed. Oftentimes a home or piece of land has been owned by numerous people stretching back a century or more. An owner’s title insurance policy protects from possible errors, and from future claims or undiscovered interests. Such errors and claims might include forgery of deed documents, fraud, and mistakes in public records.
Why Do I Need Title Insurance?
For many people the purchase of a home is the single largest investment that they will make, therefore it makes sense to protect it. Your owner’s title insurance policy protects your ownership rights as long as you or your heirs have an interest in the home.
Title insurance protects you from these unforeseen legal and financial title discrepancies, as well as the costs, attorney’s fees and expenses of defending against any matter insured by the policy. Likewise, title insurance can protect you from financial loss if the sale of your home falls through due to a covered defect in the property’s title.
It also can help to eliminate delays when passing your title on to someone else, and can speed negotiations when you are ready to sell your home or obtain a loan.
Title insurance cost is typically about 0.5% of the home’s purchase price, and is paid in full by the first premium, and protects your interest for as long as you or your heirs own the property.
What is an Escrow Closing?
Unlike a roundtable closing in which the parties to a transaction meet face-to-face to exchange documents and transfer money, an escrow closing uses a neutral third-party to manage the process. The seller of the property transfers all documents to the escrow agent, who holds them until the buyer transfers the money for the sale to the agent who ultimately transfers it to the seller. Essentially, a neutral third party holds the keys, title, and money until the time of closing, so everything is exchanged safely, fairly and simultaneously.
An escrow closing can avoid some of the disadvantages of the round table closing, as there is an orderly recording of the documents and transfer of the funds. While there may be a gap between the time of the closing and the recording of the documents and the update of title in a roundtable closing, the risk of this gap is eliminated in an escrow closing.
It is important to select a title and escrow company with a good reputation and who will work on your behalf in the transaction using the latest and safest technology.
In a highly competitive industry with all the pitfalls that can occur with financing, Ohio Real Title clearly stands out. We love what we do, we’re really good at it, and we think it’s important—because everyone deserves an easy, successful transaction during a stressful time. This is who we are. Contact us today.