Frequently Asked Questions

What is a Title?

Does a Deed take care of giving clear title?

What can make a title defective?

Why Title Insurance?

But the lender already requires Title Insurance, won't that protect me?

How much does Title Insurance cost?

How long does Title Insurance last?

When should I look into purchasing Title Insurance?

Is it a good idea to sell my house "for sale by owner"?

Can Hempstead County Title handle the closing?

What items are needed at closing?


What is a Title?

A title is the evidence, or right, that a person has to the ownership and possession of land. It is possible that someone other than the owner has a legal right to the property. If that right can be established, this person can claim the property outright or make demands on the owner as to its use.

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Does a Deed take care of giving clear title?

No. A deed is simply a document whereby a seller transfers his or her right of ownership, whatever it may be, to you. It is not proof that the person described as the seller is actually the owner, nor does it provide proof that he or she is the only owner with an interest in the property. Also, it does not do away with claims or rights others may have in the property. From the deed, you cannot determine what rights, liens or claims may be outstanding against your title. You would need title insurance to reveal these answers.

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What can make a title defective?

Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden "defects" are dangerous because you may not learn of them for many months or years, yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property.

A few of the most common hidden risks that can cause loss of title or create an encumbrance on title are:

  • Forged deeds, mortgages, releases or wills
  • Undisclosed or missing heirs
  • Deeds by persons supposedly single, but in fact married
  • Instruments executed under invalid or expired power of attorney
  • Deeds by persons of unsound mind
  • Deeds by minors
  • Mistakes in recording legal documents
  • Misinterpretations of wills
  • Liens for unpaid estate, inheritance, income or gift taxes

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Why Title Insurance?

BECAUSE YOU STAND TO LOSE TOO MUCH WITHOUT IT!
When you buy real estate, you can see what you are buying, right? There's the land, the buildings, the landscaping. Possibly the waterfront or the mountain view, if it's a second home. Or the traffic and other factors that contribute to success if it's a commercial site.
But there's one important thing you can't see: the title to the land. You can't see the name of the person, persons, bank, or corporation that owns or has a financial interest in the land and the buildings. So you can't be sure of the title.
Surprisingly, the quality of any title is not an absolute thing. It's a matter of opinion, where even experts thoroughly versed in the law of real estate may differ. So anyone that views your title may make an honest mistake. Or might not discover some of the hidden things that might seriously affect your title.
Things like a forged will or deed. Or a title transfer by someone under age. Or a married person conveying without his or her spouse joining in the transfer. Or fraudulent impersonations. Secret marriages. Undisclosed heirs. Invalid divorces. False affidavits. And so on.
Title Insurance is your protection as a purchaser.

HOW TITLE INSURANCE PROTECTS
First, a service known as a title search describes - as well as possible - the condition and quality of the title to the land you are buying. Then your title insurance protects you against mistakes or threats which might otherwise result in financial loss to you - including those hidden, unknown items.
Your title insurance starts the day you make settlement. It is a permanent assurance that your ownership and use will be defended promptly against claims at no cost to you, whether the claim is valid or not.

WHO TITLE INSURANCE PROTECTS
There are two basic types of title insurance protection - one for the mortgage lender and one for the home owner or real estate investor.
If a mortgage is to be placed on your new home, the mortgage lender will probably require that you purchase title insurance to protect his investment. But this mortgagee's title insurance policy doesn't protect you, the home owner. It protects the mortgage lender.
You, the home owner, need an owner's title insurance policy to protect your investment.
The cost is conservative. You pay only once. There are no renewal premiums, and there is no expiration date on the policy. Yet the protection lasts as long as you, and your heirs, retain an interest in the property.

A SMALL COST FOR YEARS OF PROTECTION
The real estate you own represents stability, permanence, and hope of the future. Don't take a chance and let it be taken from you because of a flaw in the title. It just makes good sense, for the relatively small amount it costs, to protect yourself with title insurance.
We know, because we are the title insurance experts in the state of Arkansas. If you need us, call us. We will make sure you are protected.

Copyright ©2003 Arkansas Title Company, All Rights Reserved.

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But the Lender already requires Title Insurance. Won't that protect me?

Not necessarily. There are two types of Title Insurance. Your lender likely will require that you purchase a Lender's Policy. This policy only insures that the financial institution has a valid, enforceable lien on the property. Most lenders require this type of insurance, and typically require the borrower to pay for it.

An Owner's Policy on the other hand is designed to protect you from title defects that existed prior to the issue date of your policy. Title troubles, such as improper estate proceedings or pending legal action, could put your equity at serious risk. If a valid claim is filed, in addition to financial loss up to the face amount of the policy, your owner's title policy covers the full cost of any legal defense of your title.

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How much does Title Insurance cost?

The one-time premium is directly related to the value of your home. Typically, it is less expensive than your annual auto insurance. It is a one-time only expense, paid when you purchase your home, yet it continues to provide complete coverage for as long as you or your heirs own the property.

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How long does Title Insurance last?

For the owner of the property, the owner’s policy of title insurance will last as long as you or your heirs retain an interest in the property. For the lender, the loan policy of title insurance will last as long as the mortgage is active.

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When should I look into purchasing Title Insurance?

As soon as you and the seller sign the earnest money contract. With a brief summary of the details, our team of title experts will begin a search of the public records and issue a title commitment. Because there are a number of steps we must take to make certain that we know all we can about the title, it is wise to get the ball rolling as soon as possible.

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Is it a good idea to sell my house "for sale by owner"?

Almost every FSBO (for sale by owner) contract has potential problems, both legal and simple. There are many reasons why we urge you to contact a realtor when selling your home. Besides the obvious reasons you should use a realtor, such as the realtor community customer base, listing capabilities and advertisement of your home for sale possibilities, consider the following: you do not have firsthand knowledge of competitive values of your property; you do not know how to write a valid contract; it is time consuming and a hassle to be available to show your property at the prospective buyer’s convenience; you might take on needless and useless improvement projects to sell your home where a real estate professional can save you these expenses; without a real estate professional, the owner will normally end up selling the home under market value; a real estate professional better understands the normal and expected fees and costs that will be incurred by both sellers and buyers and can assist in negotiating any sale and the accompanying terms so that there are no surprises at closing regarding payment of fees and costs; and you may accept an insincere offer and then spend months, perhaps in litigation, to free your property in order to put it on the market once more.

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Can Hempstead County Title handle the closing?

Yes. Hempstead County Title can facilitate all aspects of your real estate transaction for all parties involved -- collecting necessary documents, insuring compliance with the lender's closing instructions, making arrangements for proper payment and distribution of funds, and making sure all documents are correctly and fully executed and recorded. We are fully prepared to work with you from the beginning of your transaction all the way through to its conclusion.

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What items are needed at closing?

You will want to have these items complete or in hand when you come to the closing

Buyer

  • Buyer's copy of purchase agreement
  • Cashier's check(s) to make all payments
  • Proof of purchase of insurance for fire, casualty, etc.
  • Photo identification (passport, driver's license, or state-issued identification card)

Seller

  • Seller's copy of purchase agreement
  • Invoices for any unpaid taxes, utilities, assessments, and latest utilities meter readings
  • Receipts for last payment on mortgages
  • Bill of Sale of personal property covered by the purchase agreement
  • Any unrecorded instruments that affect the title
  • Keys and any garage door openers to all locks on the property
  • Proof of satisfaction of any mechanics' liens, chattel mortgages, judgments, or mortgages that were paid prior to the closing
  • Photo identification (passport, driver's license, or state-issued identification card)

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