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You've decided to purchase a home and hope to take possession as soon as possible. The terms have been agreed upon and all the financial arrangements have been made. But there's one important detail remaining. Before the transaction can close, a title search must be made. The most accurate description of title is a bundle of rights in real property. A title search is the process of determining from the public record just what these rights are and who owns them. A title search is a means of determining that the person who is selling the property really has the right to sell it, and that the buyer is getting all the rights to the property (title) that he or she is paying for. The process can be undertaken by the title company in those jurisdictions where the company maintains offices. In some areas, however, searches are made only by practicing attorneys. However the search is performed, in most real estate transactions today a title insurance policy is purchased to assure the buyer that he or she has purchased a valid title. In those transactions where title insurance is involved, the title company must determine insurability of the title as part of the search process. This leads to the issuance of a title policy, which insures the existence or non-existence of rights to the property. The title insurance company will, at its own expense, defend the title and will pay losses within the coverage of the policy if they occur. But what, exactly, is involved in a title search? Legacy Title Services, as an agent of Attorneys' Title Insurance Fund, Inc. ("The Fund"), provides the following step-by-step review: Chain of title: Today more than ever, good data is critical. And The Fund provides members with the fastest, most accurate title information available. The Fund's Attorneys' Title Information Data System, or ATIDS, is the most comprehensive database of public records information in Florida, with over 100 million records available on-line exclusively to its members, including Legacy Title Services. Tax search: A due and unpaid tax or special assessment is a prior lien or claim on the property above all others. If a buyer purchases property with unpaid and past due taxes or assessments against it, he or she is likely to find a government body--the village, county or state--placing the property up for sale to pay those taxes or assessments. A tax search reveals the status of the taxes. Title insurance protects the buyer against loss from unpaid and past due taxes and assessments. Report on possession: The purpose of ordering a survey is to supplement the information learned from the title search. In the eyes of the law, any buyer of real estate is assumed to have notice of all matters properly shown in the public records as to that real estate as well as any information the an actual inspection may reveal. If the surveyor detects an unrecorded easement or other evidence of outstanding rights that could affect the owner's title and possibly the value and intended use, Legacy Title Services tells the buyer of these things before he/she closes the purchase. Those matters must then either be disposed of or shown as exceptions in the title insurance policy. The survey is also important to ensure that no boundary disputes exist, and that the physical structures existing on the property (house) do not violate the setback requirements of the municipality in which the property is located Judgment and name search: It is extremely important to be sure that title to property is not subject to judgments against the seller or previous owners. Title insurance provides this protection. A judgment against a person named Smith may affect the title of a seller named Smith, depending on whether or not they are the same person. So all possible variations of the name must be examined. Rights established by judgment decrees, unpaid federal income taxes, and mechanics' liens all may be prior claims on the property ahead of the buyer's or lender's rights. If a judgment is discovered that constitutes a defect in the title, it is pointed out, and the seller must then eliminate it before the title of the new buyer can be insured free and clear of that judgment. Commitment: The mortgage lender is as concerned as the buyer about the quality of the title because the property is to be security for the new mortgage loan. The mortgage lender requires assurance that it has a valid first (or another acceptable priority) mortgage lien on the property. This is not only common sense, but generally is a legal requirement of regulated mortgage lenders. The lender's title insurance, however, doesn't protect the new buyer of the property. Although the land is the same, the interest of the buyer and interest of the lender are very different. The provisions of a lender's title insurance policy are very different from those of a buyer's policy, so the buyer should obtain his own policy.
Legacy Title Services, Inc.
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