Buying and selling homes is an exciting time, for buyers, sellers, realtors, and other real estate professionals. It can also be a bit confusing. We at Zing Title strive to help make the transaction go smoothly and to give the customer peace of mind.
Things feel like they’re happening pretty fast and often some important things can go unexplained- like title insurance. Here’s some basic information to help you through the process!
Simply stated, the title to a piece of property is the evidence that the owner is in lawful possession of that property. In Florida, the seller must convey marketable title to a purchaser.
Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property. Each title insurance policy is subject to specific terms, conditions and exclusions.
How does title insurance differ from other types of insurance?
Insurance such as car, life, health, etc., protect against potential future events and is paid for with monthly or annual premiums. A title policy insures against events that occurred in past ownership or interest of the real property its only paid for a one-time premium at the time of closing.
Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the actual policy. These things could cost the owner a lot of money to fix unless they are insured.
Purchasers and lenders need title insurance in order to be insured against these various possible title defects. The buyer, seller and lender all benefit from the issuance of title insurance. In Florida, the owner’s title insurance premium is customarily paid for by the seller as part of their closing costs. The mortgage or lender’s policy is paid for by the buyer and is included in their loan estimate of closing costs.
How is a title policy created?
After the customer opens the title order with us, we begin a title search. A preliminary report called a title commitment to insure is given to all parties of the purchase agreement for review and approval. At the closing, the title policy is created and given to the customer.
Once the contingencies of the purchase contract have been satisfied and the borrower’s loan is approved, the closing documents are prepared for the closing. The parties then agree on a time and date to finish the transaction. Once at the appointment the documents are signed, monies collected and all items are disbursed. The seller gets any proceeds and the buyer gets title to the property (and usually the keys!).
What are the policy types?
A standard owner’s policy insures the new owner/homebuyer, and if the buyer/owner is getting a mortgage to finance the cost of purchasing the property; a lender’s policy insures the priority of the lender’s security interest. There is also expanded coverage policies for the new owner, please speak with us for further details!
Escrow refers to the process in which the funds of a transaction (Earnest Money Deposit, Water Escrow, Seller Proceeds) are held by the title company, pending the fulfillment of specific instructions or closing of the transaction.
Customers have the choice of who closes their transaction?
Yes, buyers and sellers have the right to choose which title company they want to have insure their interest and provide the settlement services. We are proud to say that Zing Title is 100% independently owned, all of our business is brought in by referral or customer service related activity.