Frequently Asked Questions

Why do I need Title Insurance?

Do I have to purchase Title Insurance?

What is the difference between owners and lenders policy?

How do I choose a title company?

How is the title company involved in my transaction?

How is the title company involved in my transaction?

Most title insurance companies also provide closing and settlement services in connection with real estate transactions. The following is an example of a typical real estate purchase, as it may involve a title company:

After a contract has been signed and accepted by all parties, the listing agent will forward a signed copy of the contract along with any earnest money to the title company who will be performing the insurance and closing work.

The title company will then search the property records, identifying any mortgages or liens that need to be paid off. The title company will issue a commitment for title insurance, detailing the premiums owed for insurance, requirements to be fulfilled prior to issuance of a policy, and any exceptions to coverage that may have been identified (covenants, mineral rights, easements, etc.)

The title company receives instructions from the buyers’ lender, laying out additional fees that need to be paid (appraisals, credit reports, flood certifications, and accounts for taxes and insurance), and the title company will then work up a settlement statement for approval. The settlement statement details all sides of the transaction, and shows any and all fees and premiums that are to be paid.

At the closing table, sellers sign the deed to the property over to the buyers, everyone signs disclosures required by the title company, and the buyers will sign their loan documents. Once all monies have been accounted for (including any “cash to close” required from the buyers or sellers), the sale is complete and keys are given to the buyers.

After closing, the title company uses the money that was brought to closing (either by the buyer, seller, or money that was wired to the company by the lender), and pays off any outstanding liens, gives the seller any money that is due to them, and pays the underwriter the premium for insuring the property.

The title company then records the deed to the property at the county, as well anything that needs to be recorded to show the lenders’ interest in the property. Upon recording, title policies are issued, signed, and mailed. Owners’ policies are mailed to the buyer (often with a copy of their recorded deed), and lenders’ policies are mailed to the lender.

The title policy is an important document -- evidencing the contract of insurance between the owner of the property and the title insurer -- and should be kept in a safe location in case any issues arise later.

For Sale By Owner

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Division of Insurance

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