What is Title Insurance?
Title insurance differs from other insurance policies as it protects you from future claims from events that happened in the past. Title insurance protects the insured from losses that result from claims of ownership or interest to real estate. Past transactions on a piece of real estate is part of the chain of title. Defects in the chain of title could affect the validity of ownership. Examples of defects are forgery, incomplete probate, clerical errors or the lack of a signature from someone with a claim to ownership, such as a spouse or a missing heir. Title insurance insures that you are protected from any claim on your ownership for the property you purchased. Unlike other insurance products, a premium is paid once at closing and protects your property for as long as you own it. The first title insurance policy was issued in 1878.
Whom does a Title Insurance Company Represent?
The title insurance company represents the contract. It is the job of the title insurance agent to make sure the contract terms are met by everyone involved. The title insurance company can only do what has been agreed upon in the contract.
How much does Title Insurance cost?
Title insurance rates are based on the amount of coverage. The State of Florida sets the minimum rate which is known as the promulgated rate. At present the promulgated rate is $5.75 for every $1000 of coverage. So if you sold a home for $100,000 the insurance premium would be $575.00. The promulgated rate does decrease per thousand for larger policies. As stated above,the promulgated rate is the minimum rate that may be charged. Title insurance companies can charge more. Anclote Title Services only charges the promugated rate.
There are also additional fees associated with the closing that title insurance companies charge. The title company will collect a closing fee and title search fee. They may also collect courier and wire fees if these services were used. These fees are all normal to a standard closing. However, the fees vary with some title companies charging more than others. Sometimes these increased fees are justified based on the complexity of the transaction. These more complicated transactions are not the norm and you should carefully review all fees you are charged.
Beware of any fees outside the normal fees described above. Some title insurance companies have been known to charge for things like storage fees, download fees, notary fees, document preparation fees, etc. Some title insurance companies have become very adapt at charging fees to increase their profits. At Anclote Title Services, we never charge for these types of fees.
How to read a HUD.
The HUD is the closing statement that outlines the charges and credits to both the seller and buyer. Page 2 is where individual charges are itemized. The column furthest to the right is for the seller and to the left of this column is for the buyer. The description of the charges is to the left of these columns. "POC" stands for Paid Outside of Closing. These are for items you have already paid like Termite Inspection, Appraisal Fees, Home Inspection, Homeowners Insurance, etc.
To read the HUD simply follow the column that is for your side of the closing. When you see a charge, look to the left and find the description. If there is something you don’t understand ask the title insurance agent to clarify it for you.
Page 1 adds the total of the charges from Page 2 to the purchase price and gives credit for any items the buyer receives at closing. The amount at the bottom of the page is the amount needed from the buyer at the time of closing. For the seller, Page 1 deducts the closing costs from Page 2 and any mortgages to show at the bottom of the page what they will receive at closing.
What is the difference between an independent and affiliate title insurance company?
It should be understood that all title insurance companies have the same legal responsibilities whether they are affiliated with another company or an independent company like Anclote Title Services.
An Affiliate Title Insurance Company is owned or partnered with another company. The company is usually affiliated with a real estate company, lender or attorney. An affiliated company relies on the affiliation to survive. Their day to day business operations can be influenced by the affiliation. The affiliated title insurance company is not free to dissociate itself from anyone within the affiliation. Business is driven to them by the affiliation.
An Independent Title Insurance Company is not in any partnership or affiliation with another company. Although an independent company will have clients that are real estate agents and lenders, the business side is not in the client’s control. An independent company is free to associate or not associate with any company or person they wish. The independent company must rely on its reputation and service to get and retain clients.
Before affiliated companies became prevalent, it was the norm for real estate agents and lenders to call independent companies and ask for quotes. There was a greater effort to get the best deal they could for their client. Real estate agents and lenders that are affiliated with a title insurance company direct their business to the affiliated company, without regard for the cost to their client. Some affiliated companies have been known to charge outrageous fees which is not good for the customer or title insurance industry.
You can take steps to guard against some of these fees. You have already taken the first step by reading this page. When you list your home with a real estate agent do not let them put in the contract that you will use their affiliated title insurance company. Require that they get at least three quotes from independent title insurance companies for you to compare. You are paying for the title insurance and are entitled to give your business to anyone you want. If the real estate agent tells you that by not using their title insurance company you will have to pay a fee to them or their broker, then look for another realtor as they do not have your best interest in mind.
Anclote Title Services, Inc is here to help you. If you have other questions, please call us. Give us a chance to earn your business. You won’t be disappointed.
Anclote Title Serivces, Inc
38868 US Hwy 19 N.
Tarpon Springs, FL 34689
727-934-5453
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