Palm Beach Real Estate and Loans

I'm always talking about buying/selling real estate in Palm Beach Gardens - everything on the Agent / Broker's side and quite a bit about mortgages also.  But there is another part of the process that you also need to understand....

The following title information was provided by Todd Chandler of Guarantee Title:

What is a Title?

Title can be described as the evidence or right that a person has to the ownership and possession of property (real estate). A defect in title can be any legal right held by someone other than the owner to claim property or to make demands on the owner of that property. When clear title is not evident, real estate transactions are delayed or halted altogether until the defect is cleared.

What is Chain of Title?

Chain of Title is the complete history of instruments and recordings used to transfer ownership of a property from the very first owner all the way to the present owner. An unbroken chain of title can often go back several hundred years!

What can cause a Title to be defective?

There are many ways a title can be defective and the causes can be known or unknown at time of recent transfer. Ocasionally, title defects are not discovered in time and a property might even change hands with clear title.

• Fraud - False claims of ownership, forged deeds, wills, signatures, conveyances, instruments, false representations, false records, illegal acts of trustees, guardians, administrators, and attorneys.
• Human error - Errors in copying, indexing, recording; errors by administrators, executors, trustees, guardians and attorneys; destruction of records.
• Improper deeds and wills - Deeds by persons of unsound mind, minors; deeds delivered after death or without the grantor's consent; invalid, suppressed, erroneous wills, missing heirs, unsettled estates.
• Liens and other rights - Liens for unpaid estate, inheritance, income, property and gift taxes; homestead rights, community property rights; irregular court proceedings, court opinion reversals, lack of court jurisdiction; defective foreclosures.

What is Title Insurance?

Title insurance is exactly what its name implies. It is an insurance policy taken out to protect an owner against losses arising through defects in the title. If the title is insurable, the company guarantees the owner against loss due to any defect in title and/or expenses in legal defense of the title. This piece of mind protection can save hundreds of thousands of dollars in damages to the property owner.

What are the Owner's Policies and Lender's Policies?

When completing a real estate transaction, there is generally two different title policies going into effect at closing.

• Lender's Policies protect the lender and is sometime called the Loan Policy. This policy specifically protects the mortgage lender against title defects. Such a policy does not protect the owner against defects in the chain of title.
• Owner's Policies protect the homeowner specifically against any defects or other warrants that may arise during the purchase, ownership or future sale of the property.

Tomorrow in Part 2 we'll go over the costs involved.