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Title
Insurance |
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Underwriter |
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TIOF
Title only uses an underwriter whose name you can trust. Fidelity
National Title Insurance of New York, is a subsidiary of Fidelity
National Financial, a multi-billion dollar insurance company.
Fidelity National Title
Insurance -
With origins that can be traced back 150 years, Fidelity National
Title Insurance Company, through its underwriting subsidiaries,
is one of the nation's premier real estate service companies,
providing title insurance and other real estate-related products
and services. |
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Title
Search Plant |
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We
strictly use the best title plant when we do our title searches
and abstracts to ensure that our title commitments are accurate
and therefore provide a high degree of confidence. |
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Real
Estate Transactions - A Step By Step Explanation |
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When you have made that important decision to sell your property,
the first step is usually to contact a real estate agent who
will offer the property for sale on your behalf. The buyer
and the agent enter into a listing agreement which specifies
the actual dollar amount of the commission, as well as the
general terms for the agent’s services.
The real estate agent is responsible for marketing the property
in order to attract potential buyers. The agent’s efforts
usually result in a number of buyers responding to the listing.
The number of buyers and the frequency of response may vary
depending on the prevailing real estate conditions and the
general economic conditions at the time of listing. The agent
determines which of the potential buyers is financially qualified
to enter into sale price negotiations with the property owner.
The buyer and the seller agree to a purchase price with the
assistance of the agent(s), They can now enter into a Purchase
Agreement or Contract which sets out the terms of the agreement
such as price, closing date, and contingencies.
It is rare that the buyer can purchase the property on an
all-cash basis. The buyer must therefore look toward one of
the many sources of financing available today. Once a lender
has been chosen, the buyer and lender enter into an agreement.
This agreement outlines that, under certain conditions, the
lender will provide the buyer with enough money to purchase
the property. The conditions require the buyer to repay the
monies according to an agreed repayment schedule. The purchaser
must also pledge the property as security for the debt.
Repayment of the money lent to the buyer for the purchase
of the property is usually negotiated on a monthly basis.
It is calculated so that the entire amount of principal and
interest due is repaid in a fixed number of years. If the
entire debt is not paid in this time (i.e., fully "amortized")
the total amount to be paid is called a "balloon"
payment.
The lender processes and underwrites the buyer’s application.
This involves ordering credit reports, verifications of salary,
appraisals, verification of debts, and possible investor and
private mortgage insurance company approval. When loan approval
appears likely, title insurance is ordered, often by the real
estate agent.
Commission for the real estate sale is normally paid by the
property seller to the selling and listing agents and is based
on a percentage of the final sale price of the property. |
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The
History of Title Insurance |
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The
need for title insurance arose historically from the fact that
traditional methods of conveying real property did not provide
adequate safety to the parties involved. Until a century ago,
transferring title to real property was handled primarily by
conveyancers, who were responsible for all aspects of the transaction.
The conveyancer conducted a title search to determine the ownership
rights of the seller and any other rights, interests, liens
or encumbrances that might exist with respect to the property,
and, based on its search, provided a signed abstract (or description)
of the status of the title. Although the conveyancer was generally
not a lawyer, that individual was recognized as an authority
on real estate law. The origin of title insurance is directly
traceable to the limited protection that the work of such a
conveyancer provided to the purchaser of real property.
In 1868, the celebrated case of Watson v. Muirhead (57 Pa. 161)
was filed in Pennsylvania. In that case, Muirhead, a conveyancer,
had searched and abstracted a title for Watson, the purchaser
of a parcel of real property. In good faith and after consulting
an attorney, Muirhead chose to ignore certain recorded judgments
and to report the title as good and unencumbered. On the basis
of Muirhead’s abstract, Watson went ahead with the purchase,
but was subsequently presented with, and require to satisfy,
the liens that Muirhead had concluded were not impairments to
title. Watson sued Muirhead to recover his losses, but the Pennsylvania
Supreme Court ruled that there was not negligence on the conveyancer’s
part and dismissed the case. Watson, an innocent purchaser who
had suffered financial damages because of the encumbrances on
his title, had no recourse.
The decision of Watson v. Muirhead demonstrated clearly that
the existing conveyancing system could not provide total assurance
to purchasers of real property that they would be safe and secure
in their ownership. As a result of that decision, the Pennsylvania
legislature shortly thereafter passed an act "to provide
for the incorporation and regulation of title insurance companies."
The first title company was founded in Philadelphia in 1876.
This new type of insurance (called "title insurance"),
addressed the concerns raised in Watson v. Muirhead by providing:
(1) responsibility without proof of negligence; (2) financial
protection through a reduction of the risk of insolvency; and
(3) the assumption of risks beyond those disclosed in the public
records (for which the abstractor was not liable).
Since the late 1800s, the title insurance industry has grown
to where it now is an essential component in an overwhelming
majority of real estate transactions in this country. The services
provided by the title insurers may vary somewhat from one area
of the country to the other, reflecting the different laws,
customs and procedures of the various states and counties throughout
the nation. But the essential purpose of these services is the
same – to assist all of the parties in real estate transactions
by ensuring that the acquisition or transfer of an interest
in real estate can be effected with a maximum degree of efficiency,
security and safety. |
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The
Title Search |
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When
a person purchases a parcel of real estate, it is not only the
physical property itself that he or she acquires. The buyer
is also acquiring the seller’s rights and interests, "the
seller’s title," in the property. It is essential
for the prospective purchaser to know, before the transaction
takes place, precisely what rights or interests the seller can
convey. The purchaser also needs to know who else may have rights
or interest in the property and about any encumbrances against
the property that may affect the use or enjoyment of the land.
The title search must cover all these rights and interests.
There are three basic components to a ‘title.’
| 1. |
Rights and interests
that are disclosed in the public records or by physical
inspection of the property, i.e., deeds, mortgages, leases,
etc., parties in possession, utility easements, etc. |
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Rights and interests
that are not recorded but exist, i.e., limitations imposed
by laws and statutes, etc. |
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Rights
and interests that are hidden, i.e., forgeries, secret
marriages and unknown heirs. |
Even though there may be one owner of a property, the actual
‘rights’ and ‘interests’ may be owned
by many others. The "owners" own what is referred
to as a "fee simple" title which means they have purchased
the most vital and valuable rights of possession which includes
use, occupancy, enjoyment, and inheritance. Although the ‘owner’
of the property may own these valuable rights, there may be
other parties such as utility easements, mortgages and liens
who also have legitimate rights to the property. These rights
owned by other parties are called encumbrances.
The task of searching the public records by the title searcher
is not an easy job. They must comb the public records to identify
existing rights and interests of title. Once they are satisfied
that they have found all aspects of title that can be seen and
recognized, they submit the title search to the title examiner
who will produce an opinion of the title. It is from this opinion
that the title insurance company will issue the title insurance
policy.
In some areas, the title searcher is instructed to do a relatively
short search which includes local custom or title insurance.
In other areas, the title may track back to a royal grant, charter
or the government of the United States.
It is rare to find a title with a perfect history when traced
from its original source (or root) to the present day. Whenever
the ownership of property is transferred, another ‘link’
is added to the ‘chain of title.' Every time a new link
is added, it opens up the potential for problems as the chain
is still subject to interpretation. The main task of the title
searcher is to determine the various rights and interests that
make up each link in the chain as it has passed from one owner
to another. |
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