|
What
is Title Insurance?
Title Insurance protects residential and commercial real estate
owners and lenders from certain hidden title risks and adverse
interests the owners/lenders incur for a loss or damage suffered
because of an undisclosed lien or other matter that affects
the property as of the date of the policy. A more extensive
treatment of this subject can be found here.
What
are some examples of Hidden Risks Covered by Title Insurance?
1. Forged Deeds
2. Fraud
3. Voidable Documents
4. Unknown Heirs
5. Errors in the Public Record
Is
Title Insurance Needed?
YES!! Purchasing your home or business is one of the largest
purchases of your life. Without title insurance you could
lose all your financial assets accumulated in your lifetime,
such as the equity in your home or the amount you borrowed
to buy your house.
What
is a Title Search?
It is a detailed and comprehensive search of the public records
concerning the property, including property taxes records,
recorder of deeds records for deeds, mortgages and liens,
and circuit clerk records for probate, divorce, and judgments.
What
are the 2 Main Types of Title Insurance Policies?
1. Owner's Policy-This policy insures the new homebuyer that
title is vested in them, that there are no defects or encumbrances
on the property, that there is marketable title to the property,
and that there is legal access to and from the property.
2. Lender's Policy-This policy insures the lender that their
mortgage is a priority lien over claims that others may have
on the property.
What
are the Main Protections offered by Title Insurance?
1. Indemnifications against losses
2. Payment of legal fees in defense of a claim against the
property
What
items are needed at the Closing?
1. All parties should bring a valid picture I.D. issued by
a state or the U.S. Government. Foreign passports cannot be
accepted.
2. Buyers should bring insurance binder and proof of payment
of homeowner's insurance or the invoice if it has not been
paid.
3. Buyers should also bring in a cashier's check or official
bank check, made payable to Associated Capital Title, for
the balance needed to purchase the property. Pursuant to the
Good Funds Law, funds must be wired if they exceed $50,000.
4. A current payoff letter for all mortgages the sellers have
on the property.
5. A deed and property transfer tax form necessary to convey
the property from the sellers to the buyers.
6. The original pest inspection report.
7. Any other documents necessary to convey and receive marketable
title to the property.
What
is the Settlement Statement?
The settlement statement (often called the HUD-1 or the closing
statement) lists the entire financial transaction from the
buyers' and sellers' point of view. It will list debits (a
charge or expense) and credits (an amount entered in a person's
favor). When the Buyers' debits and credits are totaled, the
credits are subtracted from the debits and the difference
is the cash the buyer must bring to the closing.
How
may I hold title to real estate in Illinois?
1. If only one person will be going into title, then title
is held in severalty or solely.
2. If two or more people will be holding title, then:
a. Tenants in Common. There is no survivorship aspect, i.e.,
when one tenant in common dies, that share will pass under
their will or by law (intestate succession) if there is no
will. The surviving tenant(s) in common do NOT receive the
deceased's share of the real estate.
b. Joint Tenancy. This has survivorship aspects. When one
joint tenant dies, the surviving joint tenant receives the
deceased joint tenant's interest in the real estate (by operation
of law).
c. Tenants by the Entirety. This also has survivorship aspects
AND limited protection against creditors. This is only available
to husband and wife for their homestead property (property
they live in). When one dies, the survivor automatically receives
the entire property by operation of law. Additionally, while
both husband and wife are alive, a judgment creditor of only
one of the spouses cannot enforce their judgment lien against
the property (except for an IRS federal revenue lien).
|
An
Agent of Chicago Title Insurance Company