1) What is title insurance? How much is it? Should I buy it?
Owner’s title insurance protects the Buyer of a property against liens or undiscovered defects in the title prior to the time of purchase. Title insurance secures the registered title and protects the owner of the property from losses arising from defects that occur before the date of the policy. Therefore, it differs from other types of insurance because it is retrospective in nature. It also differs from other types of insurance because there is only a single premium charged for title insurance, but the protection lasts as long as you own the property. There are different title insurance policies that protect both owners and lenders. Lender’s title insurance serves the same purpose, but only for the lender in a transaction. The fee is typically about $2.50 per $1,000 for lender’s coverage and $3.50 per $1,000 for owner’s coverage. Lender’s insurance is required and you are strongly encouraged to purchase homeowner’s insurance for numerous reasons. If you have any questions about this or if you have been told that homeowners insurance is not necessary, please contact one of our attorneys to make an informed decision.
Since one’s home is often the largest financial investment, it is very prudent and wise for the owner to want to protect that investment and enjoy the benefits of home ownership. The homeowner’s title policy is that protection.
2) What types of claims does Homeowner’s Title Insurance cover?
The owner’s title policy insures against loss or damage suffered by the owner due to historical discrepancies such as forgery, undisclosed but recorded prior mortgages, bankruptcies, liens or divorces, improperly recorded deeds, missing wills or heirs, and inadequate descriptions of the property. .
3) Why do I need a lawyer for a closing?
An attorney should always be present at a closing to answer legal questions and resolve disputes. Most lenders require the presence of an attorney at all closings. At our firm, all closings are always done by an attorney. In Rhode Island, the buyer has the right to choose the attorney who handles the title search. You should always insist on an attorney rather than a title company, as we will help resolve any issues that arise and will not limit our scope to mere title searching.
4) When do I get my income as a Seller?
The seller will receive the proceeds of the sale after the deed has been registered. In our office we always register the documents the same day if the closing occurs before noon, and within 24 hours after the closing in any case, except weekends and holidays.
5) What happens if the house is not ready for me to move in on closing day?
If the home is not in move-in condition at closing, you will need to consult an attorney. At our firm, if we are handling the closing, we will always strive to help the buyer with the situation. Options include postponing the time of closing, extending credit to the buyer, or depositing seller funds until the property is in proper condition.
6) Where does the closing take place?
The closing will take place in the attorney’s office for the buyer. Occasionally, the closing may occur at the lender’s office or at a real estate agency, but the vast majority close at the attorney’s office.
7) What form of money should I bring to closing?
Buyers must bring a bank check or certified funds to closing. If one of these options is not available, buyers must arrange to transfer funds directly to the closing attorney at least one business day prior to closing day. If verifiable funds are not present at closing, filing of documents will be delayed and the buyer may not be able to move into the new home. Personal checks or cash are accepted in nominal amounts up to a maximum of $1,000.
8) What other obligations exist as a Seller of a property?
Seller is required to present a Smoke Detector and Carbon Monoxide Detector Certificate at closing. To obtain a certificate, the seller or seller’s agent must contact the fire department of the municipality in which the property is located for inspection.
9) Will I receive a property inspection at closing?
No. In Rhode Island, lenders do not require surveys. Unless the buyer requests a survey, no one will physically check the property lines. In Massachusetts, a lender may require a plan of the property that does not formally locate all the boundaries of the property, but does locate the home in a particular neighborhood within the boundaries.
10) Will I receive an appraisal of the property at closing?
You are always entitled to a copy of the lender’s appraisal if a lender is involved on your behalf as the buyer. The appraisal is often presented at closing, or can be requested in writing.
11) What if my property is in a flood zone?
If the property you are buying is in a flood zone as shown on government maps, the lender will require you to obtain flood insurance. You should be careful about this whenever the property is near water, as flood insurance is usually quite expensive.
12) Does title search or title insurance cover zoning issues?
No. Zoning determinations are completely independent of property title. If you would like an attorney to verify the zoning for you, an additional fee will be required.
