What is title insurance?

Title insurance protects against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans. In other words, it protects real estate owners and lenders against loss or damage they might experience due to liens, encumbrances, or defects in the lawful possession of that property.

Why do I need title insurance?

Title insurance protects you, as the buyer, from inheriting existing debts or legal issues that could interfere with your rights to the property. For guides and more information about Title Insurance and the different policies that are available, please see our Homebuyer Education page.

What are the fees payable to the title company?

There are two main costs associated with title and escrow closing: the closing fee and the title insurance premium.

Your purchase transaction will include an Owners Policy, and if you are borrowing funds from a lender, a Lenders title insurance policy. The cost of the title insurance premium is a rate filed with the Department of Insurance by our National Underwriters and is customarily split equally between the buyer and seller on a transaction.  You can find the cost of your title insurance premium here, which will be based on the purchase price of the home you are buying or selling.

What other fees are there when buying or selling my house?

Every transaction can vary, but here are some other common expenses when buying or selling real estate: Agent’s commission, Broker’s fee, a plot plan or survey, Termite Inspection, Home Inspection, Transfer tax (also called “doc stamps” – a tax payable to the local state, county and/or municipality) and recording fees (a filing fee payable to the county).

How does title insurance differ from other types of insurance?

Title insurance is a one-time cost, protecting your rights in real property against events that occurred in the past and those who owned it. Other kinds of insurance, auto or homeowners for example, protects against future events and is paid for with ongoing, monthly premiums.

Who needs to sign the purchase agreement? 

On the seller’s side of the agreement, all of the vested titleholders in the property and their spouses. On the buyer’s side, anyone who will be going into title, or in other words – anyone who will be recited on the Deed to the property.

If I am married, does my spouse have to take title with me? 

No, your spouse does not necessarily have to take title with you. The general rule of thumb in most states and in most circumstances is “One to buy, two to sell”, although there are exceptions. However – if you are borrowing funds from a lender in order to purchase your home, it is possible that the Lender will require the spouse to take title with you.

If my spouse is NOT in title, why do they have to sign in order to sell?

Rights of a spouse vary from state to state but many times, the spouse’s signature on the contract and Deed is necessary in order to convey any marital, dower, or potential inheritance rights in the property. Their signature is typically needed even when the property is investment property and not the couple’s homestead.

What happens if the owner of the property is deceased?

The requirements to convey their interest in the real estate will certainly vary depending on the circumstances. The title examiner and title underwriter will take into account whether or not another person was in title with the deceased, and if so, whether or not they were joint tenants (for more information on joint tenancy, see below). If the deceased was the sole titleholder, or held a tenant in common interest, it is likely that a probate proceeding will need to be opened in the appropriate county court, in order to appoint someone with the authority to convey the real estate. Other requirements, such as the payment of inheritance tax and clearance of potential Medicaid liens may need to be made, as well. All of the steps necessary to convey clear title to the real estate will be disclosed and set out in a Title Insurance Commitment prior to closing.

What is the difference between tenants in common and joint tenants with rights of survivorship? 

The right to transfer one’s co-ownership interest at death is what distinguishes between tenancy in common and joint tenancy. When a titleholder passes away, any surviving joint tenant will receive the deceased joint tenant’s interest in the real estate. This permits any surviving co-owners, whether one or more, to acquire the decedent’s interest without probate proceedings. However, in some states including Nebraska, that interest is subject to state inheritance tax, depending on the relationship of the surviving party to the deceased and depending upon the value of the real estate interest inherited.

Tenancy in common causes two or more individuals to each hold an undivided interest in real estate. If one of the co-owners should pass away, their interest may pass to their heirs after proper Probate administration of their will, or in the event that they do not have a will, may pass to another party after the appointment of a Personal Representative with the authority to convey their interest in the real estate.