posted on July 21, 2002 12:12:12 PM new
when a person sells a house,does the buyer ask to see the seller's title insurance certificate??
my friend said you cannot sell the house unless you can show prospective buyers that piece of paper.
if i understand title insurance,it protects the seller from title defect,but the buyer should be more interested to see the title/deed and do his own title search if he wants to buy the house.
posted on July 21, 2002 01:11:47 PM new
I just completed sale of my house last month. However, I'm in Canada so I don't know if the rules are different where you are. In fact rules here vary from province to province. I would imagine the rules where you are vary from state to state.
I certainly was never asked by my real estate agent for "proof" that I owned the property and I don't think she did a title search to see if there were any liens against the property (but she did check out property tax records). I did have a copy of the survey from when I purchased the property and because since it was only 5 years old, a copy of it was handed out to prospective purchasers as well as a copy of a standard questionaire that I had filled out and signed concerning the condition of the house.
Lawyers became involved only when the purchaser (a nervous first-time buyer) wanted my counter-offer (a small variation of the standard contract) reviewed by his lawyer. Also, before any offer was presented to me, my real estate agent checked with the prospective purchaser's bank to make sure that the amount of the offer to be financed by mortgage had in fact been pre-approved the bank concerned.
When the contract was signed, the paperwork went to both our lawyers. I would have thought that the title search would have been done very close to the closing date because a lien could be placed on the property right up to the point where the property exchanged hands.
posted on July 21, 2002 03:43:48 PM new
thanks for the response,it is true in the states also-the title seach is done after the buyer makes an offer and accepted by the seller.
a title company often serves as closing agent and performs the title search.
may be my friend who was asked to show her title insurance paper by prospective buyer is one way for the buyer to be certain she has title to the house .
my friend could be the cleaning lady babysitting the house while owner is away on long vacation.
posted on July 21, 2002 03:56:44 PM new
It may depend on what state you're in.
They may be using the title insurance as a short cut to do there own current research.
However, my title insurance only covers "recorded" defects before a certain date. So in reality, the policy only covers a screw up by the attorney/researcher missing a recorded issue when you purchased the property.
I have never heard that you must have title insurance to sell a property. Any liens, assements, defects, etc., recorded after the research was done for the policy is not covered by the policy.
Title researchers may now be relying on these policies in doing their research. I suppose that they can just research back to the date of the research on the owner's policy and feel cofident that their backside is covered by the owner's policy if anything was missed in the previous research.
Other than a time saving short cut for a title search, I don't know what good the owner's title insurance certificate would do for a prospective buyer.
posted on July 21, 2002 07:26:13 PM new
The prospective buyers should always do their own title search. Do you not have a real estate attorney handling the transaction and advising you? Considering the modest expense, unless you are a very experienced real estate buyer you should definitely have one. This is very basic stuff.
posted on July 21, 2002 09:03:20 PM new
Well I don't know much about liens but assume that a lien holder could not object to a property sale if part of the sales proceeds are diverted to pay off the lien holders claim in its entirety.
For example, a mortgage creates a lien on a property and I don't think a mortgage lender has a right to object to the sale of a property if the mortgage debt is going to be paid off with the proceeds.
posted on July 21, 2002 10:37:19 PM new
But title insurance only covers recorded issues regarding the property.
Other issues may not be recorded, such as, dower and curtesy if the owner got married after he/she purchased the house. This type of issue will not be recorded at the court house in the deed records. A house I bought had this situation. The wife had to sign a quit claim deed in order to close the sale even though her name had never appeared on the deed.
In any even, title insurance doesn't cover defects that are not actually recorded when the policy is issued.
I have no idea what use an owner's title insurance certificate would be to a prospective buyer. There are numerous things that could have transpired since the policy was issued to cloud the title, some recorded, some not.
posted on July 22, 2002 06:25:10 AM new
not so,i thought the whole idea of title insurance which comes to 1% of the purchase price of the house is to protect the buyer for defects not discovered during title search.read the terms of your title insurance,the insurance company will go to court and fight for you and pay for the legal fees,and reimburse you for your loss in case you lose the house.
there have been cases where someone forged the title record and it was not discovered during title search.
posted on July 22, 2002 10:55:13 AM new
A "standard" title insurance policy only covers recorded defects. It costs extra to cover "unrecorded" defects. I would venture that the vast majority of policies are standard.
[i]Q: Can you be a little more specific about the types of claims,
or risks, covered by title insurance?
A: Standard coverage handles such risks as:
Forgery and impersonation;
Lack of competency, capacity or legal authority of a party;
Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner);
Undisclosed (but recorded) prior mortgage or lien;
Undisclosed (but recorded) easement or use restriction;
Erroneous or inadequate legal descriptions;
Lack of a right of access; and
Deed not properly recorded.
An extended coverage policy may be requested to protect against such additional defects as:
Off-record matters, such as claims for adverse possession or prescriptive easement;
Deed to land with buildings encroaching on land of another;
Incorrect survey;
Silent (off-record) liens (such as mechanics' or estate tax liens); and
Pre-existing violations of subdivision laws, zoning ordinances or CC&R's.[/i]
