Answers to the Most Common Questions We’re Asked

When it comes to real estate, many of us know that having a real estate agent on your side is needed if you’re planning to sell your home or buy a new home. You probably also know that you need a mortgage company. You may, however, have questions about the role a title company has in a real estate transaction. Here is a list of the most common questions we get asked and the answers to those questions.

Q: What is a title company?

A: It’s our job to make sure every part of the home buying or selling process goes smoothly and legally and to make sure that the title gets properly transferred from buyer to seller. We do research to make sure no issues with the title arise in the future.

Q: What is title insurance?

A: A title insurance policy protects the buyer and the lender from any problems that might come up with the title such as someone else claiming ownership of the property or other unforeseen issues.

Q: Who chooses the title company?

A: The party paying for the title insurance chooses the title company. If it’s the buyer, the buyer chooses the title company. If it’s the seller, the seller chooses the title company. Who pays for the title insurance will be decided during contract negotiations.

Q: Why do I need title insurance?

A: As a buyer, you should have title insurance to protect you against any unknown title defects that may come up in the future. Some lenders require you to get title insurance, and most realtors highly recommend it.

Q: How much does title insurance cost?

A: The cost of title insurance varies depending on the purchase value of the home. Use the Virginia rate calculator to get an estimate. The cost of the title insurance is a one-time fee.

Q: What does a title insurance policy cover?

A: A title insurance policy protects the buyer and the lender from any claims that anyone else may have on the property. It also protects you if there are any outstanding debts on the property from previous owners. At Ratified Title Group, we work to clear up any potential issues before you close.

Q: How does title insurance protect me if there is a claim against the property?

A: If there is a valid claim against the property, the title insurer will compensate you up to the amount stated on the policy.

Q: Are there different types of title insurance?

A: Yes. There are two different types of title insurance policies. One is the lender’s policy and the other is the owner’s policy. The lender’s policy is the one required by the lender to protect their interests. The owner’s policy protects the buyer in case of title defects. It’s important to note here that title insurance issued to the builder does not cover the owner. You, as the buyer, need a separate policy.

Q: How long will the coverage on my title insurance policy last?

A: The lender’s policy lasts until the mortgage has been paid off, but the owner’s policy lasts for as long as the individual owns the property. The owner’s policy can also be transferred to heirs.

Q: What is a title search?

A: A title search is a search of the historical record of the given property. It examines deeds, court records, the existence of unresolved liens, recorded code violations, restrictions of use, easements and any judgment that might have been filed against the title. Other things that a title search can reveal are boundary disputes, illegal deeds, false impersonation and unsatisfied mortgages.

Q: Are there problems that a title search cannot uncover?

A: Yes. There are issues such as incorrect name spellings, clerical mistakes, an owner stating the wrong marital status, claims not filed in the records office and undiscovered heirs that could put your ownership in jeopardy despite a thorough title search.

Q: Do I still need title insurance if I’m buying a brand-new house?

A: You need to buy title insurance even if you are buying a brand-new house. There could be issues if the land previously belonged to multiple parties and was sold to the developer without all of the owners’ consent. It’s also possible to have mechanic liens due to contractors not being paid for their work.

If you have more questions about title insurance, we’re happy to help! Reach out to us at 571-234-5589 or by email at [email protected].