Smoky Hill Title Company*

Ellsworth County Kansas

What is Title Insurance?

Title Insurance is an insurance policy insuring a buyer’s title or a financial institution’s mortgage on real estate. Title insurance is normally obtained at the same time as the property is purchased or mortgaged. Title insurance insures the buyer’s title or lenders mortgage to the extent of the dollar amount of the policy, subject to listed exceptions. Title insurance generally takes the place of an abstract, as it is more readily acceptable to financial institutions.

In the purchase of a home for $100,000.00 with an $80,000.00 mortgage the following would generally occur:

STEP ONE The buyer and Seller would enter into a contract setting the terms of the purchase including (a) purchase price and down payment, (b) terms and provisions with regard to the type of deed to be furnished to the seller and any exceptions to the required title, such as easements, rights of ways and zoning ordinances of record, (c) closing and possession dates, (d) pro-ration of taxes to the date of closing, (e) and other pertinent terms of the agreement. The contract would normally require the Seller to furnish a title insurance policy for the amount of the purchase price of $100,000.00 insuring the buyer’s ownership interest in the property when the purchase is closed.

STEP TWO A title insurance commitment is ordered by the seller, the real estate agent or financial institution from a licensed title agent such as Smoky Hill Title Company. The order will normally request both a Buyer’s policy and a Mortgage policy. The Buyer’s policy will insure the Buyers title, for $100,000.00 and the mortgage policy will insure the Lender’s mortgage for $80,000.00, subject to the exceptions from coverage as stated in the commitment. Both policies will contain items which are not insured against called exceptions. There is a cost savings if both policies are ordered at the same time. The form of the policy will normally be that of the American Land Title Association (ALTA).

STEP THREE The title insurance commitment would normally disclose (a) the owner of the property, (b) the legal description of the real estate, (c) real estate tax information, (d) existing mortgages and liens, (e) restrictions on land use and easements, (f) objections to insurable title and the requirements to cure those objections, (g) exceptions from coverage and (h) other matters deemed pertinent.

STEP FOUR The requirements of the policy must be met or the insurance will not be issued. Typical requirements include (a) the filing of a proper deed from the Buyer to the Seller, (b) the release of any prior mortgage on the property, (c) the filing of a new mortgage from the Buyer to his or her lender, and (d) other requirements that must be complied with before an insurable title exist.

STEP FIVE The sale is closed and the required documents are filed with the Register of Deeds in the county where the real estate is located. The title company will then confirm the title requirements have been complied with and issue a insurance policy insuring the buyers title in the amount of $100,000.00 and the lenders mortgage in the amount of $80,000.00, subject to any exceptions listed in the commitment.

Before closing Buyers should have the commitment reviewed by the legal representative, or agent of their choice to be certain they understand what is insured and what is not. The requirements for insurance are normally listed in Schedule BI, of the commitment and the Exceptions from insurance coverage in Section BII. The purchase contract normally has a time in which objections to the title or title insurance commitment must be made or the objections may be deemed to have been waived. See your legal representative or agent in this regard.

Additional information for consumers on title insurance and other matters relating to the purchase of real estate can be obtained from the American Land Title Association web site at www.alta.org/consumer/questions.cfm

Sherman, Hoffman & Hipp, LC Attorneys at Law

Doing Business as Smoky Hill Title Company

FAQ

Home

Area Map

Email Us