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Q: What is Title Insurance?
A: Title insurance protects you from the ‘unforeseen risks’ that may arise from hidden claims that may be asserted against title to your property. Your title policy will protect you from financial loss associated with such claims and protect you from any undisclosed problems with the title. Unlike other forms of insurance which provide protection going forward, title insurance protects you from matters affecting title arising in the past.

Q: Do I need Title Insurance…what are the ‘unforeseen risks’?
A: The title examination or title search is an examination of the public records relevant to your property. The title examination may be the most precise and meticulous; however, it is necessarily limited to what has been disclosed in the public records. Unforeseen risks are not disclosed by the public records. Some of these risks include unlawfully executed documents, forged deeds, forged releases, erroneously indexed public records, unrecorded easements or rights of way, liens stemmed from open taxes, prior owner open mortgages and judgments, undisclosed or missing heirs, mistakes in recording, documents executed under duress and defects involving powers of attorney. Any of these unforeseen risks may cause your title to be fatally defective, thereby making the purchase of title insurance a prudent one time investment.

Q: What is Owner’s policy?
A: A title insurance policy insuring an owner of real estate against loss caused by defects or unmarketability of the owner’s title for matters arising in the chain of title prior to your ownership of the property. This policy provides coverage up to the face amount of the policy throughout the time you own the property and then continues coverage after you sell the property in the event that you have warranted the property to your buyer.

Q: What is Lender’s policy?
A: A title insurance policy based on the loan amount inurning only to the benefit of your lender. This policy provides no coverage for you as buyer and effective throughout the life of the loan. Most, if not all, conventional lenders require a lender’s policy as a condition of closing your loan.

Q: What is a location survey (or location drawing)? 
A: In cases where an institutional lender makes a loan on residential real property, it is customary for the Lender to require the title company to order a location survey of the property. The location survey shows the approximate location of the dwelling and other structures within the property boundaries. The location survey is not intended to be used for locating fences or other structures after closing. Furthermore, the location survey is not sufficient to remove the survey exception from the owner’s title insurance policy.  

Q: What is a boundary survey? 
A:  A boundary survey is the surveyor's professional opinion on the location of property lines of the subject land. The surveyor verifies the property corners to the recorded legal
descriptions for the subject property as well as legal descriptions for adjacent properties and plats at the county courthouse, the monuments set in the field, and any structures indicating lines of possession like fences, walls, hedges, and yards. The surveyor will locate any encroachments onto or from the subject property and will reset any missing monuments. The boundary survey is sufficient to remove the survey exception from your owner’s title insurance policy. Generally, Lawyers Trust Title Company does not order boundary surveys given the cost and contractual obligations involved. If you wish to order a boundary survey, you will need to make arrangements with your surveyor of choice.

Q: What is a HUD-1 statement?

A: A document that provides an itemized listing of the funds to be paid, or that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points and initial escrow amounts. Each type of expense goes on a specific numbered line on the sheet. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. The HUD-1 statement is also known as the closing statement or settlement sheet.

Q:  What are closing costs?  
A: Miscellaneous expenses involved in closing a real estate transaction over and above the price of the land and the improvements. These expenses may include such items as transfer taxes, recording fees, legal  fees, etc.

Q: What is an easement?

A: A right to use the land of another person for a specific purpose, such as for a right-of-way or utilities. For example, when deemed necessary by the local community, a utility company may obtain a right-of-way to run power lines across a private property.

Q: What is a judgment?

A: The decision of a court regarding the rights of parties in an action. A judgment often involves an award, which may be rights to a property or a specific monetary amount, that if recorded can become a lien on the property.

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