Buyer Information

Congratulations on your pending purchase of real estate. This is surely an exciting time for you! This can also be a confusing time, as much of the tasks necessary to complete the real estate transaction may seem “foreign” to you. Add to that a time restriction, and you may feel slightly overwhelmed. The explanation below is provided to help you understand the overall process and relationship between the parties to this transaction, as well as any requirements we may have of you as buyer.

Generally speaking, most title orders come to us via the lender or realtor of either the buyer/borrower or seller, depending on which area of the state you live in. As title agent, we will commence an examination of the title of the property and order the necessary information to complete the closing. The lender will provide to us closing instructions which we will review carefully. If special conditions are required by the lender to close the loan, we will make sure the proper steps are taken to fulfill those obligations.

When these matters are completed and reviewed by our staff, we will notify the buyer, either directly or via the realtor or lender who placed the title order, to arrange a time to close the loan. We will also advise the buyer of any funds he or she may need to complete the transaction. Effective April 1, 2017 we can only accept a Wire Transfer for these funds. In addition, the buyer must bring a valid, government-issued picture I.D. with him or her to closing for proper identification. We cannot close a transaction without this I.D. Click on “directions” to find directions to our office for your closing.

When you purchase a house, you receive title of the property through a deed from the seller. Unlike car titles, the deed will not tell you whether or not there are any mortgages or other liens on your title. How do you make sure that the property you are buying is actually owned by the seller and is not subject to any mortgages or liens? You have a title examination performed on the property by a title company.
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In general, the title examiner will research public records such as records from the county recorder, auditor, clerk of courts for all of the county courts, and the federal court where the property is located. The title exam, once complete, is provided to Erie Title and Erie Title will prepare a Commitment for Title Insurance. The Commitment will show who owns the property and will contain information regarding any deed restrictions, easements, mortgages, or other liens on the title. The Commitment will provide the basis for any future title insurance policies we issue for the transaction.
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Owner’s Policy of Title Insurance (Basic Policy): A buyer may purchase an Owner’s Policy of Title Insurance. Most purchase agreements require the seller to pay at least part of the cost of the buyer’s policy. An Owner’s Policy insures that the buyer holds title to the property free and clear of any other interest that arose prior to the date that the buyer purchased the property, except those matters that are specifically stated in the policy and some standard exclusions.
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How does an Owner’s Policy protect you? If someone (for example, a prior owner or a lien holder) claims that they have an interest in your property that arose prior to your purchase of it, you can make a claim on your policy. The title insurance underwriter will hire and pay for an attorney to defend your title, pursuant to the terms of your policy.
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An Owner’s Policy provides 10 covered risks. Common types of claims that are covered in include improper execution documents in the chain of title, failure of a prior deed to contain a release of dower, mistakes in the recording or indexing of documents, forgeries and fraud in the chain of title, unpaid judgments and liens, and unreleased mortgages
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But wait, a title exam was performed, why should I buy title insurance? Title insurance will protect you against claims that are not apparent in the public records and therefore cannot be found in a title exam. For example, sometimes the county does not index documents properly, a release for an already paid judgment is not filed, or a person’s interest is not otherwise apparent from the title exam. If you do not actually buy title insurance, then the fact that an exam was performed will not provide you coverage in the event of a loss. The cost of your policy is a one-time fee that you pay at closing and the insurance will continue to protect you, so long as you own your property.
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Homeowner’s Policy of Title Insurance (Enhanced Policy): A buyer may purchase a Homeowner’s Policy of Title Insurance instead of a standard Owner’s Policy (this is also referred to as an Enhanced Policy). This is only available for residential properties (and not vacant land or commercial properties) and costs 15% more than a standard policy.
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A Homeowner’s Policy includes 32 covered risks. It provides the same protections as the standard policy but also provides additional protections, such as coverage for certain claims arising both before and after the policy date. For a complete comparison of the two types of policies available to buyers, please contact our office.
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Loan Policies of Title Insurance: Generally, when a lender provides a loan for the purchase of a property, the lender requires a title exam and a Loan Policy of Title Insurance. The Loan Policy insures that the lender’s mortgage will be a first lien against the property. The Loan Policy does not protect the buyer of the property. It only protects the lender. If a lender requires a Loan Policy then the cost of the Owner’s (or Homeowner’s) Policy is greatly reduced.

The following will likely be required by your lender on or before closing:

• HOMEOWNER’S INSURANCE. A homeowner fire and extended coverage insurance policy or binder for such insurance either in an amount at least equal to the total of all new mortgages on the property or 100% of the replacement cost most likely be required by your lender.
• FLOOD INSURANCE. If the premises is located within a specially designated federal flood hazard area, then flood insurance will be a mandatory requirement and you’ll be required to purchase a flood insurance policy. Your lender will notify you if this requirement pertains to you and your property before closing.
• TITLE INSURANCE. The lender usually requires that they be provided with a lender’s title insurance policy (loan policy) to protect their interest in your property up to the amount of the mortgage. While the premium for the loan policy is included in your closing costs, it does not protect you. Your ownership interests are insured only by an owner’s title insurance policy (owner’s policy). While the lender’s coverage under the loan policy decreases as the mortgage is paid down and terminates when the final payment is made, your owner’s policy remains in effect for as long as you and your heirs own the property. The owner’s policy is available for a one-time premium and at a discounted rate if purchased simultaneously with the loan policy at the time of closing.The owner’s policy provides coverage for numerous matters which are not covered by the standard attorney’s opinion of title and which are not discoverable by searching the land records. Typical examples of such matters include forged documents, the incapacity of a grantor, undisclosed or missing heirs, missing signatures, mistakes in recording, unknown creditors and problems involving access to the land. There is also an upgraded owner’s policy that provides additional protection for problems such as zoning and building permit violations, restrictive covenant violations, encroachments and defects in title.
• MANNER IN WHICH TITLE WILL BE HELD. Generally speaking, there are two ways to hold title in Ohio. Please read the section below entitled “Ways to Hold Title in Ohio” to familiarize yourself with these concepts.
• WATER, SEWER AND ELECTRICITY. You should follow up with your sellers to make sure all parties are in agreement and fulfilling their obligations with regard to final water, sewer and electricity readings, if applicable.
• OTHER REQUIREMENTS. If the mortgage involves a condominium unit or a property that is not a one-to-four-family dwelling, you may be required to fulfill other requirements.

The following information is intended only to give a brief description of the two most common ways of holding title in Ohio and is not provided for the purpose of advising how to take title. If further information is desired you should seek legal counsel from your attorney or retain an attorney for advice on these matters.

The two most common ways two or more persons may hold title to real estate are: (1) TENANTS IN COMMON, and (2) JOINT TENANTS WITH RIGHT OF SURVIVORSHIP (also known as “Survivorship Tenancy.” ).

• Tenants in Common: Each owner has an undivided, fractional share of the property, the shares of which may be equal or unequal. Regardless of the size of an individual’s share, each tenant in common enjoys full ownership of his or her share, and can sell, mortgage, use, or dispose of it as a full owner. On his or her death, the tenancy passes to heirs or to those named in the tenant-in-common’s will. If partition is ordered, the property may be physically divided and a fee simple portion given to each tenant in common, or the property may be sold as a unit and the proceeds divided among the tenants in proportion to their respective shares.
• Survivorship Tenancy: A survivorship tenancy is similar to tenancy in common, except that joint tenants have a right of survivorship. That is, when one joint tenant dies still owning his or her share, the share passes automatically to the surviving tenant(s). Thus, a survivorship tenancy cannot be transferred by will, as the nature of this form of ownership is that it automatically passes to the survivor(s). The right of survivorship also may be ended where, for example, all joint tenants transfer or convey their interest. In most states, the right of survivorship is automatically created when a joint tenancy is created. In Ohio, however, the right of survivorship must be specifically described in the document that creates it.

Source: The Law and You, © The Ohio State Bar Association and The Ohio State Bar Foundation.

This notice is provided to you pursuant to the Privacy of Consumer Financial Information Act and the Federal Trade Commission’s implementing regulation thereunder, 16 CFR Part 313.

• We collect nonpublic personal information about you from the following sources:
• Information we receive from you on applications or other forms either directly from you or from lenders and their affiliates or agents;
• We do not disclose any nonpublic personal information about our clients, borrowers, or sellers to anyone, except as is necessary in the mortgage loan transaction as may be necessary to effectuate the transaction with the lender that you have requested; to prevent fraud or unauthorized transactions; as otherwise required or permitted by law.
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