In real estate transactions, the buyers, sellers, real estate agents, and attorneys work to exchange property. But there’s also a lesser-known party working on behalf of everyone, known as the Abstract and Title Company. Title companies verify ownership of property, issue title insurance, and officially close the transaction of a real estate sale and purchase. Have you ever wondered what goes on behind the scenes of a real estate closing? Here’s what happens at the abstract office while we are waiting to close on a property.
Your Abstract and Title Company collects information about a property to verify its history. When they sort all of the information, they’ll have an “abstract” that explains who has legal ownership of land. Essentially, the abstract office’s job is not only to help close the transaction, but also to protect the investment of all parties. This is necessary for property owners because there’s a risk that the owner of a property does not have a legal right to that property. Are you wondering how this is possible? Let’s discuss how a property owner may not have legal ownership rights.
If there have been any errors or omissions with the information about ownership of property, then the actual owner can use documents to establish legal rights to the property. At this point, the legal owner can take the property and demand that it’s used a certain way. When this happens mortgage lenders and homebuyers are left with legal fees and financial loss. This is why an Abstract and Title Company also issues Title Insurance.
Does Title Insurance protect you when someone else has legal ownership of a property you purchased? If you live in Durant, Oklahoma, the answer may surprise you. Every state has different laws, but here in OK, one form of Title Insurance is optional, while the other is almost always required of you. Unfortunately, the one that protects your interests isn’t the one you’re always required to purchase. At this point, you’re probably wondering, “if my Title Insurance isn’t protecting me, then who does it protect?” The most common form of Title Insurance issued is a Lender’s Policy. It protects the investment for mortgage lenders, who are also at risk of loss due to property ownership claims. Most lenders require in the contract that a homebuyer needs to pay for the Lender’s Policy.
The other form of Title Insurance is known as an Owner’s Policy. This is the type of Title Insurance you need to protect yourself from title defects. Unlike auto insurance, which protects you from unforeseen events that may occur in the future, Title Insurance protects you from transfers of ownership that occurred in the past. If someone makes a claim that the ownership of your land is incorrect because of improper recording, fraud, forgery, liens, encumbrances, or defects of title, then Title Insurance protects your financial investment. Ownership information can turn up months, or even years, after you’ve purchased a home. And this is bad news for anyone that hasn’t protected themselves with the right form of Title Insurance!
If you live or are planning to move to Durant, OK, then you need someone who can represent your best interests and help you protect your real estate purchase from any undiscoverable issues!
Whether you’re ready to purchase a home or sell a home in the area, we would be glad to assist you with the transaction. We will assist you through the entire process of buying and selling a home, so that you’re always at ease. Contact us today, so that we can tell you all the ways we will protect your family and your finances as you buy or sell a home!