Monarch Title Services is a trusted partner within the real estate community. The purchase/sale of Real Estate is most times the largest investment a person will ever make! We understand that though you may own a home, you might not know and understand every step that is necessary to complete a Real Estate Closing. Our staff enjoys educating, explaining and even “holding the hand” of real estate owners and/or buyers through the closing process which can often be a confusing and sometimes emotional course to navigate. We believe the following information will be helpful for you to understand more about Title Insurance and our Services. However, please do not hesitate to call our office to discuss your concerns.
WHAT IS TITLE INSURANCE?
From time to time title insurance is often confused with Homeowner’s insurance. The two are very different. Homeowner’s insurance will insure your property against any damage that may occur, whereas title insurance will insure against any defects that have occurred in the past, effecting the chain of title to your Real Estate. There are three general types of Title Insurance Coverage: Lender’s, Owner’s and Closing Protection Coverage.
HOW DOES TITLE INSURANCE PROTECT A HOMEOWNER?
When purchasing a home there are many risks involved, an Owner’s Title Insurance Policy insures the owner/buyer of the real estate. The Owner’s Title Insurance Policy protects the owner of a home against defects in the chain of title to the property such as False Impersonation, Forged Deeds, Deeds by Minors or Persons of Unsound Mind, Invalid Documents executed by Power of Attorneys, Invalid Deeds delivered after death of the Grantor, Deeds by supposedly single persons BUT actually married, Unrecorded Easements, Undisclosed Heirs, or a myriad of different situations that may arise in the examination of the chain of title to the real estate. For a one-time low premium, you receive the protection of an Owner’s Title Insurance Policy against items such as the “hidden risks” mentioned above. Another benefit of an Owner’s Title Insurance Policy is savings off the purchase of your next Title Insurance Policy. Should you sell/refinance your home within 10 years of the purchase of your Owner’s Policy you will receive a discount of approximately 30% off the premium of the new policy (Owner’s or Lender’s) being purchased.
HOW DOES TITLE INSURANCE PROTECT THE LENDER?
The most commonly issued title insurance policy is Lender’s Title Insurance. A Lender’s Title Insurance Policy is required by Lenders when refinancing or purchasing a home with a Mortgage. The Lender’s Policy guarantees the Lender to be in first/best lien position on the title to the real estate. Should the Lender’s Mortgage go into default for any reason and the bank would have to sell the home, the Lender’s Policy protects the Lender against any additional liens filed against the property effecting the lien position of the Lender. Therefore, if the Lender is forced to sell the home, they will receive the proceeds from the sale to pay off the mortgage in default. A common question, which arises with Lender’s Policies, is “Why Do I Have to Buy a New Lender’s Title Insurance Policy when I refinance my home?” Your original mortgage title insurance policy only provides coverage for the Lender providing that mortgage. Upon payment in full of the insured mortgage, the policy becomes null and void and the coverage under that policy no longer exists.
CAN I GET A DISCOUNT ON TITLE INSURANCE?
You can receive up to a 30% discount* on your title insurance premium when you provide your Owner’s Policy of Title Insurance or the Settlement Statement from the purchase or refinance of your home
HOW DO I GET THE DISCOUNT?
You must provide one of the following items to the Title Company handling your closing:
- Owner’s Policy of Title Insurance from the purchase of your home
- Full copy of HUD-1 Settlement Statement or Closing Disclosure Form from the purchase of your home.
- Full copy of HUD-1 Settlement Statement or Closing Disclosure Form from the last refinance of your home. (Refinance Only – if you’ve owned your home more than 10 years)
Unfortunately, the Ohio Department of Insurance mandates that we can not honor reissue rates without a copy of the previous POLICY (not Commitment) or Settlement Statement. Further, the rule requires that the prior policy MUST be less than 10 years old.
CLICK HERE FOR PDF – “REISSUE RATE DISCOUNT HANDOUT”
WHAT IS CLOSING PROTECTION COVERAGE?
The Closing or settlement of a real estate and/or mortgage loan transaction can be characterized as having two components. One component pertains to the title to the Premises and the title insurance policy. The other component pertains to the handling of funds and documents by the Licensed Agent. A title insurance policy does not cover losses due to the mishandling of funds or documents by the Licensed Agent. However, Closing Protection Coverage, as outlined below, does provide such protection. The Closing Protection Coverage indemnifies you against the loss of settlement funds resulting from any of the following acts of the Licensed Agent, or anyone acting on behalf of the Licensed Agent, subject to certain conditions and exclusions specified in the Closing Protection Coverage Form:
- Theft, misappropriation, fraud, bank failure, or any other failure to properly disburse settlement, closing or escrow funds; and
- Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent.
CAN YOU SELECT A TITLE COMPANY OF YOUR CHOICE?
YES. You may find that your Real Estate Broker, Realtor, or Lender/Bank may recommend a few companies of their choice based on the experience they have encountered in past real estate transactions. There are also situations where the seller in a purchase/sale transaction OR the Lender/Bank in a refinance chooses the title company and pays the title insurance premium. You are not obligated to use that company; however, by using a company of your choice you may be required to pay the premium.
I’VE LISTED MY HOME FOR SALE WHAT’S NEXT?
While your Realtor is working hard to market and sell your home, we know this can be a very hectic time as you prepare for showings, packing and moving to your new home! Many Times, in the process of packing your belongings, we find that some of the items we may need to ask for have already been packed away in a box which only creates more work for you!
Therefore, we’d like to offer the following list of items that we may need to ask you for as we approach the closing on your home:
- Owner’s Policy of Title Insurance or Settlement Statement/Closing Disclosure Form from the purchase of your home. (See Reissue Rate Discount for Title Insurance attached)
- Location Survey identifying the boundary lines of your property, where the home and outbuildings sit within the property lines, as well as any fences, easements, etc. that are located on/under your property.
- Mortgage Information:
- Loan Number
- Social Security Numbers
- Seller’s Written Authorization to obtain payoffs, etc. (if needed)
- Homeowner’s or Condo Association Information (if applicable)
- Water and Sewer Service providers (if applicable)
As time allows, please gather these items and keep them in an easily accessible location so they are ready to forward on when it is appropriate for us to request this documentation.
CLICK HERE for “Letter to Seller for Realtor Listing Packet”
WHAT IS A CLOSING?
A closing is the formality of finalizing the real estate transaction, which consists of all parties to the transaction properly executing the closing documents for the financing and/or transfer of the real property and the disbursement of the monies collected at closing to the appropriate parties as outline on the Closing Disclosure Form or HUD-1 Settlement Statement.
WHAT IS REQUIRED TO INSURE A SMOOTH CLOSING?
The ultimate goal in every real estate purchase or refinance transaction is a closing that takes place as scheduled with as little stress on the parties involved as humanly possible. If all parties involved in the transaction have been cooperative in providing the information necessary for the title company to properly handle the transaction, there should be no further requirements to insure a smooth closing. Monarch Title believes that a well prepared closing is a necessity, not a luxury. Knowing that you have an energetic, personable and confident team handling your transaction can assure you of a successful closing.
WHAT DO I NEED TO BRING TO CLOSING?
You are required to bring two forms of I.D. of which one must consist of a picture.
(If applicable) You are required to bring your cash to close in the form of a certified check payable to Monarch Title Services. Wires are also acceptable for larger amounts of money due at closing.
You are required to bring any documents needed at closing as instructed by your Title Company, mortgage broker, lender or realtor.
WHAT HAPPENS AFTER WE CLOSE?
Upon the completion of your closing, the Title Company will disburse the monies collected at closing to the appropriate parties as outlined on the Closing Disclosure Form or HUD-1 Settlement Statement. Additionally, the appropriate documents such as the Deed and/or Mortgage will be immediately sent to the County Courthouse for transfer and recording of the documents. Once the recorded documents are received back from the courthouse, the Final Title Insurance Policies are issued to the appropriate parties and mailed out to the parties with the original recorded documents. It is recommended that you keep your Title Policy and Deed in a safe and easily accessible location as it could save you quite a bit of money on future closings.
http://www.hud.gov – Housing and Urban Development Site
http://www.realtor.com – National Association of Realtors Sites
http://www.ourfamilyplace.com/homebuyer – Home buying information
http://www.realestateabc.com/homeselling – Sellers information site