Purchasing a home can become complicated. This especially rings true of foreclosures and short sales. If you decide to invest in a distressed property, it’s essential to have a deep understanding of how title insurance works. It starts out simply enough, like any real estate transaction with a buyer and a seller. A price is negotiated for the property, and contract terms are set in place.
After the contract is negotiated in a short sale, a mortgage lender must approve it before it becomes a solidified deal. If the property in question is bank-owned, the homebuyer presents an “as is” real estate purchase contract to the lender representative. The listing agent then submits it to the bank, who typically puts forth a counter-offer. In particular instances such as these, it’s important to have a title agent oversee all of the details during the closing.
The title agent communicates with the purchaser, real estate agent, the bank and the mortgage lender. The most significant function of the title agency is to research the property’s ownership history. This includes looking into the “chain of title,” which includes previous owners, as well as any liens, encumbrances or claims. At close, buyers purchase owner’s title insurance to protect themselves and lender’s title insurance to protect the lender. The title policy is an indemnity against loss or damage up to the insured price (which is almost always the purchase price) according to the terms of the policy.
Title insurance is an investment in your future. It is a one-time purchase and lasts as long as the buyer owns the property according to the terms of the policy. Contact Acuity National Real Estate Solutions, LLC, a Freibert & Mattingly Title Group LLC company, at (502) 238-7500. We provide our clients with the best of both worlds—old-fashioned professional excellence supplemented by the cutting edge technology necessary for an optimized process and smooth, speedy transactions. In today’s market, you need an agile title and closing partner that can still keep its feet on the ground. To learn more about Acuity’s services, visit www.ftgclosings.com.