Realtors & Agents: Here's the "anatomy" of Title Insurance
As a real estate agent, you know firsthand that buying or a selling a home can be overwhelming. Clients can be confused or frustrated with the amount of paperwork involved in the transaction. In addition, fees associated with closing can compound the problem. Title insurance is one of the most-often misunderstood items, yet its value is priceless. As an advisor to your clients, you are in a unique position to help them understand title insurance and the hazards of not having it.
A is for "Schedule A"
Schedule A of the policy has the coverage amount (which is usually what the owner paid for the property), the address, how title was held at the time the policy was issued, and it provides a legal description of the property. All of this information, of course, is information helpful to a listing agent.
B is for "Schedule B"
Schedule B will list exceptions from coverage. Exceptions are items that affect the property at the time the policy that the insured owner is presumably aware of. These can include but are not limited to easements, restrictions, mortgages, and sometimes prior issues that were discovered on title but have been “insured over.”
Effective Dates
It is important to remember that the title policy contains good information through the date it was issued by the title insurance company. While most other insurance protects an insured from what MIGHT happen, a title insurance policy protects an insured from what DID happen. There may be subsequent matters affecting title after the policy is issued, so that is why every buyer should purchase their own policy and not rely on the policy the seller had.
C is for Getting a Copy of the Most Recent Policy
As a selling agent, it is beneficial to request a copy of the title insurance policy from the sellers or their agent. With this copy, your buyer might very well be able to obtain his or her policy at a discounted rate.
If you are the listing agent, ask the seller for a copy of their policy or have them sign a request that you can send to the title insurance company requesting a copy that you can have in your file ready to present should you be asked or if issues come up.