What is a Title?
What is a Title Search?
What kinds of problems can a title search reveal?
Are there problems that a title search cannot reveal?
30 Common Title Problems
What is Title Insurance?
How much could I lose if a claim is filed against my property?
Why do I need title insurance?
How does Title Insurance protect my investment if a claim should arise?
The owner of the property has a Deed – Isn’t that proof of ownership?
Wouldn’t a title abstract show property limitations & restrictions?
What about an attorney’s opinion?
The owner did this six months ago. Why do I need another one?
If the builder has it why do I need it?
Are there different types of Insurance policies?
What does the owner’s policy cover?
How much does it cost?
How long will it last?
What is a real estate settlement?
Why do I need a settlement company?
Where can I get it?
Why Frederick Title?

What is a title? 

A title is the foundation of property ownership.  It is the owner’s right to possess and use the property. 

What is a title search? 

It’s a detailed examination of all available public records on a property to verify the seller’s right to transfer ownership and to uncover any potential challenges you might face.  A title search should reveal such things as unpaid taxes, unsatisfied mortgages, judgments against the seller, and restrictions limiting the use of the land.  However, even the most diligent search may fail to reveal some hidden hazards, such as those mentioned earlier.  That’s where title insurance comes in. 

What kinds of problems can a title search reveal? 

A title search can show a number of title defects and liens, as well as other encumbrances and restrictions.  Among these are unpaid taxes, unsatisfied mortgages, judgments against the seller and restrictions limiting the use of the land. 

Are there problems that a title search cannot reveal?
There are many title issues that can arise to cause the loss of your home. 

Title issues not disclosed by the most careful search of the public records – called hidden hazards- are the most dangerous.  Because of them, your abstract may be perfect, but your title worthless.  Your attorney’s examination may be the finest that skill, experience, and legal knowledge can produce, but your title may still be defective. 

An owner’s policy protects you as well as your heirs from financial loss caused by title issues.  And the title insurer, without expense to you, will defend you against a claim made against the title of your property.  The one-time premium is small.  The protection is great. 

30 Common Problems
Listed here are 30 title problems that can occur.  You may not discover them when you buy real estate, but months or years later, they can result in the loss of your property or an expensive lawsuit. 

30 Common Title Problems 

• False impersonation of the true owner of the land

• Forged deeds, releases, etc.

• Instruments executed under fabricated or expired power of attorney

• Deeds delivered after death of grantor or grantee or without consent of grantor

• Deeds to or from a defunct corporation

• Undisclosed or missing heirs

• Misinterpretation of wills

• Deeds by persons of unsound mind

• Deeds by minors

• Deeds by aliens

• Deeds by persons supposedly single but secretly married

• Deeds or adoption of children after date of a will

• Surviving children omitted from a will

• Mistakes in recording legal documents

• Want of jurisdiction of persons in judicial proceedings

• Discovery of will of apparent intestate

• Falsification of records

• Claims of creditors against property sold by heirs or devisees

• Deeds in lieu of foreclosure given under duress

• Easements by prescription not discovered by a survey

• Deed of community property recited to be separate property

• Errors in tax records, e.g., listing payment against wrong property

• Deed from a bigamous couple

• Defective acknowledgements

• Federal condemnation without filing of notice

• Corporation franchise taxes, a lien on all corporate assets

• Erroneous reports furnished by tax officials

• Administration of estates of persons absent but not deceased

• Undisclosed divorce of spouse who conveys as consort’s heir

• Marital rights of spouse purportedly, but not legally, divorced

What is title insurance? 

First, the word title is a collective term for all your legal rights to own, use, and dispose of land.  Title includes all previous ownership, uses, and transfers.  To legally transfer real estate property, a title search must be performed and, in most cases, the title must be found free of any circumstances that could endanger your right of ownership.  Title insurance protects against the possibility of future loss should your legal rights to your property be challenged. 

How much could I lose if a claim is filed against my property? 

That depends on the claim.  In an extreme case, you could lose your entire home and property – and still be liable to pay off the balance of your mortgage.  Most claims aren’t that dramatic, but even the smallest claim can cost you time, money and aggravation, and you may have to pay costs for a legal defense. 

Why do I need title insurance?
Buying a home is, for many of us, the biggest investment we’ll ever make.  Knowing this, most homeowners provide for the security and safekeeping of their homes by insuring them against hazards such as fire, theft and weather damage.
But there is another hazard that can pose an even greater risk to homeownership:  Defect in the title to your property can cause you to lose part of all of the investment in your home.
Fortunately, there is a way to protect your investment from these title defects.  It comes in the form of title insurance.
What is title insurance and why do you need it?  In the following pages, we’ve listed the answers to these and other commonly asked questions.
We suggest that you read through this information carefully.  It will help you to better understand the value of title insurance in protecting your homeownership.  And the general real estate information will help make the home-buying process a smoother one.

How does title insurance protect my investment if a claim should arise? 

If a claim is made against your property, title insurance will, in accordance with the terms of your policy, assure you of a legal defense – and pay all court costs and related fees.  Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the policy. 

The owner of the property has a deed.  Isn’t that proof of ownership? 

Not necessarily.  A deed is just a document by which the right of ownership in land is transferred, whatever that right may be.  It’s not proof of ownership, and it doesn’t do away with rights others may have in the property.  In addition, a deed won’t show you liens or claims that may be outstanding against the title. 

Wouldn’t an abstract show property limitations and restrictions? 

Maybe – and maybe not.  An abstract is a history of the property title as revealed by the public records.  Abstracts may contain errors and do not disclose “hidden hazards” that can threaten your property title if you do not have a title insurance policy. 

What about an attorney’s opinion? 

An attorney’s opinion is based on a search of the public records.  So, once again, even the most exhaustive search of these records may not reveal everything.  Unlike a title insurance company, an attorney is not liable if you should suffer loss because of “hidden hazards” in the title. 

The owner of the property I want to purchase has lived in the home for only six months.  He had a title search done six months ago.  Why do I need another one? 

Because the owner could, in a very short time, do many things to encumber the title.  For example, he could grant easements or construct improvements that encroach on adjacent property.  He could get married or divorced, or have a lien filed against the property.  It is necessary to conduct an up-to-date search to uncover any such problems. 

If the builder of my home already has title insurance on the property, why do I need it again when I purchase the land from him? 

A title policy insuring the builder does not protect you.  Also, a great many things could have happened to the land since the builder’s policy was issued.  Liens, judgments and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property – causing you aggravation and costing you money. 

Are there different types of title insurance policies? 

Yes.  Basically there are two different types of policies – a loan policy and an owner’s policy.  The loan policy protects the lender’s interest in the property as security for the outstanding balance under the buyer’s mortgage.  The owner’s policy safeguards the buyer’s investment or equity in the property up to the face amount of the policy.  (Title insurers in many states offer increased policy coverage through inflation endorsements to cover increases in value due to inflation.) 

What does an owner’s policy cover? 

An owner’s policy protects your interest in the property against such unforeseen threats to ownership as: 

•  Mistakes in recording of legal documents

•  Forged deeds, releases, or wills

• Undisclosed or missing heirs, including spouses

• Deeds by persons of unsound mind

• Deeds by minors

• Deeds executed under invalid or expired power of
  attorney

• Liens for unpaid taxes

• Fraud

 For a one-time premium you pay during the closing process, your title insurer assumes responsibility for all legal expenses to defend the title to your property if it’s ever challenged.  Ask your real estate professional about purchasing an owner’s title insurance policy. 

How much does title insurance cost? 

Probably a lot less than you think.  Charges vary in different sections of the country, but generally the cost of title insurance (including search, examination and related services) amounts to about one percent, or less, of the cost of the property.  And unlike other insurance premiums, which must be paid annually, a title insurance premium is paid one time only, usually at settlement. 

How long does title insurance coverage last? 

What is a real estate settlement?
For you, the home buyer, it's the day your dream becomes a reality. However, in real estate terms, settlement is the final step in the home buying process whereby ownership of real property is transferred from seller to buyer. Purchasing a home usually represents your single largest investment. Preparations for settlement should start as soon as the contract of sale is accepted. This is the time to select your title company. The closing itself takes about one hour in which numerous documents are explained and signed, funds are received and disbursed, last minute questions on the condition of the property and operation of systems are answered and the keys are delivered. In many instances, buyers need to coordinate settlement with the arrival of their movers and cannot afford delays.

Why do I need a settlement company?
Buying a home can be both exciting and overwhelming. A settlement company performs a variety of functions necessary when a home is bought. Our services include ensuring that you get clear title to your new property; reviewing and explaining all of the settlement documents to the buyer and seller, and obtaining all required signatures; ordering and reviewing the survey for your new property; paying off and releasing any existing mortgages or liens; recording all necessary documents with the county land records and insuring that settlement occurs in accordance with the terms and conditions of the contract of sale and instructions from the lender.

Where Can I Get It?
Frederick Title. Contact us at 301-695-8770 or email us for more information.

Why Frederick Title

1.   Free Contract Review
2.   Attorneys in-house to assist you with your settlement.
3.   Knowledgeable, experienced, caring and professional staff.
4.   Accommodating and flexible in scheduling your settlement.
5.   Established relationships with local lenders, builders and
      Realtors for over two decades.
6.   Disbursement of proceeds at settlement.
7.   Quality assurance program.
8.   Competitive Fees & complementary bottle of wine after each
      settlement.
9.   Free Real Estate Settlement Guide.
10. Frederick Title is independently owned and operated - so
      you  never feel pressured.