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What is an Abstract? Why do I need it?

Have a question? Often times the answer can be found here. If you do not find the answer you are looking for, feel free to contact us.

Q: What is an Abstract?
A: An abstract is a history of the title to a particular tract of land. It is not a title! It consists of a summary of the material parts of recorded instruments affecting the title of the real estate.

Q: What is a Title?
A: A title is the evidence, of 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.

Q: What is Title Insurance?
A:
Title insurance is a contract to protect an owner against losses arising through defects in the title to real estate owned. If the title is insurable, the company guarantees the owner against loss due to any defect in title or expenses in legal defense of the title pursuant to the terms of the policy.

Q: Do I need Title Insurance?
A:
Most definitely! Title insurance is a means of protecting yourself from financial loss in the event that problems develop regarding the rights to ownership of your property. There may be hidden title defects that even the most careful title search will not reveal. In addition to protection from financial loss, title insurance pays the cost of defending against any covered claim
.

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Q: What can make a Title Defective?
A:
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 indeed 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. However, there are many possible causes of title defects that no examination can disclose. That is because they have never been recorded and thus do not appear in the abstract. A title insurance policy protects the owner against all these hidden risks; those listed below and many more:
Fraud. False claims of ownership, forged deeds, wills, signatures, conveyances, instruments, false representations, false records of all sorts, illegal acts of trustees, guardians, administrators, and attorneys.

Human Error.
Errors in copying, indexing, recording; errors by administrators, executors, trustees, guardians and attorneys; destruction of records.
Improper deeds and wills. Deeds by persons of unsound mind, minor; deeds delivered after death or without the grantor's consent; invalid suppressed, erroneous wills, missing heirs, unsettled estates.
Liens and other rights. Liens for unpaid estate, inheritance, income, property and gift taxes; homestead rights, community property rights; irregular court proceedings, court opinion reversals, lack of court jurisdiction; defective foreclosures.

Q: What is a Torrens Title?
A:
In a very limited number of states the Registered Land System is used. Under this system, a court proceeding has been brought naming parties who have an adverse interest in the property. If everything in the proceedings is completed and handled properly the Plaintiff is said to have a good title. However this is not a title guarantee by the state, in most cases. The Torrens System has been abandoned by most states that had adopted it, primarily because the associated court proceedings complicated title transferring, delayed real estate sale proceedings and caused extra and unnecessary expenses.

Q: What does Title Insurance cost?
A:
The cost is directly related to the value of the property. The higher its value, the more coverage is needed. The premium is small compared to the total purchase price. The premium is paid only once and remains in force for as long as the property is owned by the insured and continues to protect the insured on warranties after it is sold.

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