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Replies (10)
- Kevin Olson, Jessica Laude, "Higher Living Team"
- Contributions:1954
Great post Ron! Buyers really need to be aware of this, and so do the agents writing offers for clients on forclosures! It's very easy to understand, but so often not explained!
- ProfessorBaron
- Contributions:303
Ron, what does an Enhanced Owner's Title insurance policy give you that a regular policy does not? Thank you.
- RON BUFORD, "ron.buford"
- Contributions:122
The Enhanced Owner's Title Insurance Policy will extend coverage beyond that time-frame covered under the special warranty deed. Policies can vary in coverage, price, etc so you should really ask your closing agent and title company to outline the policy and your options. If you have specific questions let me know and I can put you in touch with an expert.........
- Karrina Taylor Brown, "Karrina Taylor Brown"
- Contributions:22
I recommend hiring your own title company to close the transaction. When the seller/lender's title company handles the closing they often gloss over title defects or ignore details.
- ProfessorBaron
- Contributions:303
Hi Ron,
Good info. In California my Chicago Title guy says they pretty much require a Grant (aka General Warranty) deed to insure the property. They might make exceptions, but the vast majority are Grant deeds.
An FDIC contract I just reviewed for a friend in St. Louis comes with a Special Warranty Deed....so he's going to have to make sure the title policy he gets covers the FDIC ownership period and before that for a long time...or he should not buy it due to risk.
Karrina, even if I hire my own company I still don't know how to protect myself against them (although I have a better idea now if I don't get a Grant deed - and I do know to look at my policy for Easements, Liens, Lis Pendens, etc.)....and then I'd have to pay for another policy too...
Good info. In California my Chicago Title guy says they pretty much require a Grant (aka General Warranty) deed to insure the property. They might make exceptions, but the vast majority are Grant deeds.
An FDIC contract I just reviewed for a friend in St. Louis comes with a Special Warranty Deed....so he's going to have to make sure the title policy he gets covers the FDIC ownership period and before that for a long time...or he should not buy it due to risk.
Karrina, even if I hire my own company I still don't know how to protect myself against them (although I have a better idea now if I don't get a Grant deed - and I do know to look at my policy for Easements, Liens, Lis Pendens, etc.)....and then I'd have to pay for another policy too...
- Gary Coffin, "garycoffin"
- Contributions:6
I am a title agent and write policies in New England. As long as we conduct a title examination and the title is clear during our search period we can issue either a standard or enhanced policy regardless of the type of deed used to convey. The enhanced policy is restricted to residential property. We are not able to issue an enhanced policy on commercial, construction, manufactured housing or land only transactions. We primarily write with First American Title Insurance Company and have found the additional coverage you get with their version of the enhanced policy is well worth the extra premium. The following link gives you a breakdown of the additional coverage afforded under their enhanced policy which they call the "Eagle" policy: http://www.firstamne.com/general/eagle_owner.htm. One additional note, some lenders will provide an owners policy at no cost to the buyer when they are purchasing property owned by the lender. Generally a standard owner policy will be issued. Typically the buyer will be able to obtain an enhanced policy by paying the cost of the premium difference at closing.
- ProfessorBaron
- Contributions:303
Hi,
All, regarding title policies we were discussing. Did you know that if you purchase a standard policy (not the extended) and your transfer a property insured in your personal name to a family or revocable trust, you have just terminated your title insurance policy! That's what my Chicago Title guy says!
Very scary, I bet there are many people out there who unknowingly terminated their title insurance. A problem with title is rare of course, but there are going to be some folks who find out the hard way... unfortunately.
All, regarding title policies we were discussing. Did you know that if you purchase a standard policy (not the extended) and your transfer a property insured in your personal name to a family or revocable trust, you have just terminated your title insurance policy! That's what my Chicago Title guy says!
Very scary, I bet there are many people out there who unknowingly terminated their title insurance. A problem with title is rare of course, but there are going to be some folks who find out the hard way... unfortunately.
- Gary Coffin, "garycoffin"
- Contributions:6
Professor Baron
Your Chicago Title guy is correct! For that reason and several others, the enhanced policy is well worth the extra premium you pay. Also, if a buyer purchases a standard policy and then conveys the property to their trust, they can call their title agent and see if they can get an endorsement to the standard policy extending coverage to the trust. Some of the underwriters will extend the coverage, either at no charge or for a nominal fee. However, this may vary between states and underwriters and takes action on the part of the insured. The enhanced policy automatically extends coverage at no extra charge and without action by the insured.
Your Chicago Title guy is correct! For that reason and several others, the enhanced policy is well worth the extra premium you pay. Also, if a buyer purchases a standard policy and then conveys the property to their trust, they can call their title agent and see if they can get an endorsement to the standard policy extending coverage to the trust. Some of the underwriters will extend the coverage, either at no charge or for a nominal fee. However, this may vary between states and underwriters and takes action on the part of the insured. The enhanced policy automatically extends coverage at no extra charge and without action by the insured.
- ProfessorBaron
- Contributions:303
Thanks Gary. I have another one for you. Chicago issued a preliminary ALTA extended which I signed off on before I closed escrow on a recent purchase. When I got the final policy it was CLTA - which is a standard policy in California! The old bait and switch! Needless to say I am going to give them about a week to reissue a ALTA before I get mad!
- Claudia Williams, "BlueRibbonProperties"
- Contributions:142
That is good information. Definitely do your title search before buying foreclosure properties.
Warranty Deed vs. Special Warranty Deed
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- 5.0/5.0
- (8 reviews)
Contributions:122A general warranty deed is a promise to the buyer that the seller will warrant prior problems with title, not just those that occur during the seller's ownership, but back through the chain of ownership.
A special warranty deed is a deed in which the seller warrants or guarantees the title only against problems or defects arising during the period of his or her tenure or ownership. The grantor makes no warranty against defects existing before the time of his or her ownership and, therefore, a buyer has no recourse against either his seller or anyone back in the chain for breach of warranty.
Foreclosure property is ar example where you often see special warranty deeds. The foreclosing bank has no close relationship to the property and generally won't warrant the condition of title before they acquired the property through foreclosure.
To protect yourself againest potential title and ownership issues you can purchase an Enhanced Owner's Title Insurance Policy.
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