Your Title Examination: Along with the Key to Your New Home, Don’t Forget the Key to Financial Security

A very important concept to understand as part of home ownership is the importance of home title insurance. An owner’s title policy protects the buyer, as opposed to lender’s title insurance. As the name implies, the latter provides coverage only to the lender. If a title’s chain of ownership is challenged this difference can be a very significant distinction.

Your Title Examination: Along with the Key to Your New Home, Don't Forget the Key to Financial Security

In order to truly understand the real estate closing process, including the purchase of home title insurance policies, one first must be familiar with the title search, or title examination. Most real estate professionals recommend working with firms like First National Title Company (FNTC) for conducting title searches and title examinations. To accomplish these services FNTC employs an experienced team of expert title examiners that are licensed in their craft by the State of Arkansas Department of Insurance.

1 Title searches reveal restrictions that may have been put on the property. Licensed title examiners are most qualified to navigate this complex process, which involves a careful inspection of records with the office of the Circuit Clerk, the Office of the Tax Collector, and other national, state and local government offices.

2 Title examinations not only show limitations on the use of the property and rights others may have to the property, but also any outstanding liens, encumbrances or monetary obligations.

3 Title searches and title examinations uncover recorded judgments, assessments, special taxes, and other records that may influence the property’s title. A search of a multitude of public records are conducted to establish the chain of ownership.

4 One thing to keep in mind: Even with the most thorough title searches, there is always the possibility that problems with the title are not filed in the public records, further highlighting the importance of obtaining an owner’s policy of title insurance.

5 There are a number of problems, or title clouds, that could result in financial loss – or even loss of the property – if the buyer doesn’t have owner’s title insurance.

6 This brings us back to title searches. Although there is no law against performing your own examination (assuming you know the proper procedures), it usually is not an option if you require a loan to complete the purchase. Lenders usually require a qualified third party like First National Title Company to perform the search.

Call FNTC’s friendly, knowledgeable staff at any of our offices listed below. Or contact us online for more information.