Posts Tagged ‘preliminary title report’

Explaining Why Title Insurance is Necessary to your Clients, by Inwest Title, a Utah Title Company

Friday, October 19th, 2012

Other types of insurance coverage focus on possible future events and charge an annual premium, such as flood insurance or hazard insurance. Title insurance protects against loss from hazards and defects already existing in the title and is purchased with a one-time premium.

Insuring a home’s title begins with a search of public land records affecting the property. The title agent or attorney working on behalf of the underwriter examines pertinent documents to determine whether the property is insurable. Those documents include deeds, wills, trusts, outstanding mortgages and judgments, property liens, highway or utility line easements, pending legal actions and notary acknowledgements.

When title problems are disclosed during the search process, they are corrected whenever possible to avoid future claims. According to surveys done by the American Land Title Association (ALTA), title problems consistently arise in one out of three real estate transactions (36%).

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Are You Ordering a Preliminary Title Report when you should?, by Inwest Title a Utah Title Company

Friday, June 18th, 2010

Did you order your title report (PR) in a timely fashion?

Too many times we see listing agents who forget, or don’t think it is necessary, to order a title report prior to or at the time they take a listing. That could be a disaster. Yes, in most cases the title report will show exactly what you, as the listing agent, expect to see and will concur with what your sellers have told you. However, there are too many times when a title report has revealed a significant problem that will seriously impact the sale of what you thought was a great listing.

Take for example, the couple whose kids accidentally lit fire to a national forest while playing with fireworks. The couple was sued by the United States for the firefighting expenses and ultimately had a $300,000 judgment entered against them which became a lien against their home. They either didn’t know or didn’t disclose that to their listing agent who thought she had a great listing. The lien, together with the underlying mortgage debt, was far greater than the house was worth. The federal government won’t budge on what they are owed, so the couple was forced to withdraw their home from the market.

Ask yourself what you would have done if you had spent weeks marketing the house, had several showings, and finally negotiated a contract, only to find out the house for all intents and purposes couldn’t be sold? Now suppose the buyer’s agent is not too happy. After all they brought a “ready, willing, and able” buyer and are suing you for the commission. This would be an unfortunate situation and one that could have been avoided had you asked your friendly local title company to pull a title report (PR) at the time you listed the home.

Ok, so that may be a rare situation. What about the woman who has had you list her home? She originally bought it with her ex-husband, but years ago they divorced. She refinanced the house and paid him “his share.” Unfortunately, the deed recorded at the time of the refinancing wasn’t prepared correctly and the current title search shows the ex-husband is still owed 50% of the equity according to the divorce decree.

This could be a pretty messy situation if the ex-spouses aren’t getting along, since the only way to insure the property now is to have a properly-recorded deed which will require the ex-husband to cooperate with the woman who owns the home. What if you didn’t pull a title report at the time you listed the home, but had waited until the house was under contract and the buyers were in their due diligence phase? Everyone is expecting to close in two weeks and your seller is trying to track down her ex-husband.

Ok, that maybe doesn’t happen very often either, but one thing that happens often is your seller not being truthful about what is owed on the property. A title report will show the liens recorded against the property. Having that knowledge can keep you from listing what is really a short-sale candidate when you think you have a dream listing.

Knowledge is golden. Don’t get caught without the facts when you list that next home. Call us today or order your title report from our website at your convenience. It could save you and your sellers a lot of grief.