1. What is title Insurance?

Title insurance is commonly used in real estate transactions and it is important that you have a team on your side that is comprised by experts and attorneys to insure that your property is properly protected and that you have a clear title. The complexities of the issues that need to be addressed to ensure that you have been properly protected.

2. Why is title insurance important?

In real estate transactions, buyers generally seek evidence that the title they propose to acquire is marketable. Lenders seek evidence of the priority of their mortgage. In both cases, this evidence has historically taken many forms, such as a title certificate from a government office, or an abstract of title and attorney's title opinion. In almost all real estate transactions today, title insurance is the most commonly used evidence of title, because it is faster, cheaper, and provides broader protection (insuring over such things as fraud and lack of capacity) than other forms of title evidence.

3. What is a title insurance policy and why do I need it?

A title insurance policy insures the status of the state of title to a specific parcel of real property. The policy is a statement by a title insurance company that, in exchange for a premium paid, it is willing to assume the risk that title to a parcel of real estate is as it is stated to be in the policy. A title insurance policy indemnifies the insured party (the buyer or lender) against losses suffered if title to the property is not as the policy states it to be. A policy of title insurance may be purchased from a title insurance company, which typically must have been licensed by the state body having jurisdiction over insurance companies, to underwrite this form of insurance.

4. How much does title insurance cost?

The purchase price for the policy is called the premium. In Florida, the cost or premium for title insurance is regulated by the State. You can expect to pay a one-time charge ranging from a few hundred to over a thousand dollars, depending on the sale price, for owners title insurance closing.

5. What is a title insurance commitment?

A title insurance commitment is a document in which Barrister Title Company promises to issue a title insurance policy as of the date set forth in the commitment upon payment of its premium. This policy is issued in response to a customers request and is good for a ninety day period, after which it expires. The transaction for which a title insurance commitment has been requested should be consummated within that period. Barrister Title Company has no obligation under a commitment except to issue a policy when the premium is paid on a timely basis.

6. What problems/exceptions can arise with a title commitment?

As part of the title search, Barrister Title Company will list any title exceptions. Exceptions are situations where the title owner relinquishes control over a given aspect of the property, such as a shared/common driveway.

If you want to object to these exceptions, you have a specified amount of time to do so. And the seller has time allotted to resolving the exceptions. If the issues can't be resolved, the buyer can legally get out of the purchase contract.

If you don't have a real estate attorney on your Title Company's team you won't know anything about the exceptions, you won't know to object to them, and you won't get clarification about why they're necessary.

7. What will a title insurance commitment disclose?

A title insurance commitment contains the following: a description of the property to be insured, the name of the proposed insured, and the coverage limits of the policy to be issued. It will identify the current owner of the property and the specific policy form that Barrister Title Company will use to insure title. A commitment also contains a list of requirements or conditions to the issuance of a title policy and a statement of any standard and non-standard exceptions to title that exist and for which no insurance coverage will be provided.

8. What is gap coverage?

Barrister Title Company's obligation to insure exists only as of the date the commitment was issued. Significant changes in title to the property could occur between the date the commitment is issued and the date the transaction in question actually closes. For example, during this period, the property could be sold or mortgaged or a tax, mechanic's, or construction lien could be asserted.

It is, therefore, extremely critical that a title insurance commitment from Barrister Title Company be updated to the exact time of the closing in order that the title policy issued will neither be obsolete nor contain any unanticipated problems for the parties involved. This is called covering the "gap."

9. Does the seller or buyer pay the title insurance premium?

In Florida the seller generally pays the title insurance premium.

10. Why do I need title insurance if I have had the title to my house searched and my lender has required that I purchase Lender's insurance?

Lender's title insurance does not protect the owner. Even though the lenders title search may be extensive and exacting, the possibility of hidden risk or unknown risk remains. Only Barrister's Title Company Insurance will protect you, the owner against hidden hazards of real estate ownership such as forgery; conveyance by a minor or mentally incompetent person; the false representation of a married person as being single; undue influence or due many other title defects. Even the most complete and careful search of public records may not reveal the hidden hazards. Deeds executed under expired or false powers of attorney, unsatisfied claims not shown on the records are just a few of the hidden risks that makes the purchase of title insurance and a thorough title search a most investment.

11. Can you give me a summary of the closing cost?

Title Insurance. Title insurance fees include settlement fees, title examination fees and the insurance premium. The premium will vary with the dollar amount of the loan and/ or the purchase price of the property.

Documentary Stamps. The amount of $.70 per each $100.00 of consideration is due on all deeds, or other real property or any interest therein shall be assigned to another person by the seller's direction. A documentary stamp tax in the amount of $.35 per each $100.00 is due on all promissory notes or non-negotiable notes.

Intangible Tax. In order to calculate the amount due for intangible tax, the amount of the loan must be multiplied by .002.

Recording Fees. In Escambia and Santa Rosa County the rates for recording are $10.00 for the first page and $8.50 for each additional page.

Loan Costs. Loan costs may include, but are not necessary limited to, origination fees, points (discount), tax service fees, loan certification fees, document preparation fees, and any other fees that may be required by the bank or the mortgage company to service the loan.

12. What is a HUD-1 Settlement Statement?

This is a summary or account form used to illustrate the financial portion of the real estate transaction. The title company or closing agent is required by the Department of Housing & Urban Development to use the “HUD-1” or “HUD 1A” form on virtually all one-family to four-family residential real estate transactions involving a lender. This closing statement will list the purchase price and/or loan amount, closing costs for the borrower/buyer and seller, if applicable. It will show all sums being charged and disbursed to the parties involved. It also clearly summarizes the total amount due to/from the Borrower/Purchaser and to the Seller. Here’s an example of the standard form.

13. The Owners of the property I'm buying already have title insurance - won't that cover me?

A title policy insuring the current Owners does not directly protect you and its coverage's are not assignable. Also, a great many things could have happened to the land since the Owner's policy was issued. Liens, judgments and unpaid taxes from the current owners may not be disclosed until after you purchase the property - causing you aggravation and costing you money.