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. There are two types of title insurance policies – an owner’s policy and one for lenders.
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. 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.
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.
After the customer opens a title order, our experts at Zing Title do 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.