What Is Title Insurance? Albuquerque NM

I hope this article will answer your questions what is title insurance?

Title insurance is a contract under which the policy holder is protected from losses arising from defects in the title.  A title insurance company determines whether title is insurable, based on a review of the public records.  Unlike other insurance policies that insure against future losses, title insurance protects the insured from an event that occurred before the policy was issued.  Title insurance is considered the best defense of title.  The title company will defend any lawsuit based on an insurable defect and ply claims if the title proves to be defective.

The premium for title policy insurance is a one time payment paid at closing.  The cost of the policy is related to the value of the real estate.

After examining public records, the title company usually issues what may be called a title commitment to issue a title policy.  This describes the type of policy that will be issued and includes:

• Name of the insured party
• Legal description of the real estate
• The estate or interest covered
• Conditions and stipulations under which the policy is issued and
• A schedule of all exceptions, including encumbrances and defects found in the public records and any known unrecorded defects.

A standard coverage policy normally insures the title as it is known form the public records.  In addition, the standard policy insures against such hidden defects as forged documents, conveyances by incompetent grantors, incorrect marital statements, and improperly delivered deeds.

Extended coverage, as provided by American Land Title Association (ALTA) policy, includes the protections of the standard coverage policy plus additional protections.  An extended policy protects a home owner against defects that may be discovered by inspection of the property: rights of parties in possession, examination of survey, and certain unrecorded liens.

Title policy insurance does not offer guaranteed protection against all defects.  A title company will not insure a bad title or offer protection against defects that clearly appear in a title search.  The policy generally names certain uninsurable losses called exclusions.  These exclusions include zoning ordinances, restrictive covenants, certain water rights, and current taxes and special assessments.

There are two types of title insurance.  An Owner’s Policy is issued for the benefit of the owner or new buyer and his or her heirs.  A lender’s policy is issued for the benefit of the mortgage company.  The amount of coverage depends on the the mortgage loan.

In Albuquerque Metro area, it is customary for the seller to pay for the standard owner’s policy and the buyer pays for the mortgagee policy.  I hope this article will answer your question, What is title insurance?

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What Is A Seller’s Disclosure?

You may we wondering what is a seller’s disclosure?  Disclosure statements, which can come in a variety of forms, are the buyer’s opportunity to learn as much as they can about the property and the seller’s experience in it.

Not only do disclosure documents serve to inform buyers, but they can also protect the sellers from future legal action. It is the seller’s chance to reveal anything that can negatively affect the value, usefulness, or enjoyment of the property.

A seller’s disclosure is a document provided by a seller that answers many questions about their house.  Most seller’s disclosure’s are very detailed and cover many areas of the home such as structural conditions, roof, appliances, electrical, telecommunications, mechanical, water, sewer, utilities, swimming pool, hot tub, sauna, zoning, legal issues, access, parking, drainage, water supply, sewer, environmental conditions, community association, home owner’s association, and general disclosures.

The purpose of the seller’s disclosure is to provide potential buyers with accurate information known about the house by the seller.  Sellers should always answer all the questions accurately.  Smart sellers let buyers know everything they need to know up front. It’s smart because it saves everyone time, hassle and expense by preventing deals from falling apart. Also, sellers set themselves up for potential legal action by providing inaccurate information and not properly disclosing problems with their house.

Buyers should review the seller’s disclosure prior to preparing an offer.  There may be information in the seller’s disclosure that may impact your decision to write an offer and how much you are willing to pay for the home.  Buyers should read and understand the seller’s disclosure.  However, the seller’s disclosure is not substitute for a good home inspection and due diligence by the buyer.

Buyers and sellers need to take the seller’s disclosure seriously and respond accordingly.

Buyers will not receive a complete seller’s disclosure when purchasing bank owned or foreclosed properties. Some land lords that have never lived in a home may not provide a seller’s disclosure. In addition, many of the home flippers will not provide a seller’s disclosure.

It is always a good idea to get the home inspections by a certified and licensed home inspector.

I hope this article answers your question What is a seller’s disclosure?