FAQ

Title Insurance is an insurance policy that protects you and your home against any loss should title not be cleared properly or against future claims that were not disclosed at the time of closing and title transfer.  It is the insurance that the underwriter provides that guarantees legal assistance should you need to process a claim. It includes coverage for legal fees associated with investigating items necessary to legitimize the issue and settle claim.  The cost is calculated on a graduated scale and is dependent upon the purchase price per your contract.

A title and escrow company is a disinterested third party that processes and places documents and funds into escrow during the contract and disburse them in accordance with your purchase contract, which serves as specific instructions and agreed upon terms of the transfer of real estate.

This is an examination of the measurements and legal boundaries of your property.  It clearly illustrates the property lines and discloses any easements or encroachments present on the plat maps and records available to the county.  A surveyor will visit the real estate and take measurements and pictures to present to you at the time of closing.

At the time of processing your real estate transaction the title company must check for liens on the property.  Property taxes and water bills are the only household bills that can be placed as a lien against the property.  Water status is checked on every transfer and funds are placed on hold to pay the final water and sewer bills after closing.  Property taxes are checked and if not paid current will need to be.

The tax proration is based on the latest available tax bill.  Each state and county bill for property taxes differently.  It is important to make sure this is addressed in your purchase contract. For example, in Ohio, taxes are billed a year behind.  If your closing takes place in April of 2011, your tax proration will be based on the tax figures available for 2010.

The first half of 2010 will be verified paid or held to be paid on the settlement statement and the last half will be debited from the seller and credited to the buyer, as well as the first months of 2011 until the date of closing.  This ensures the buyer will be given the funds from the seller for the amount of time that the seller owned the property before the next bill is available. In states that are not on a prior year tax billing, tax proration will simply be for the time the seller owned the property before the bill becomes available.

It is important that the taxes be addressed and paid so that title is clear of any tax defects.  Special assessments and anything else that can be certified to the tax bill are also examined at the time of closing and charged on the HUD 1 Settlement statement accordingly.  This is all part of the responsibility of the title company to deliver a CLEAR title to the new owner.