Frequently Asked Questions
and some not so frequently asked questions that may provide the answer you’re looking for
Title Insurance
What is title insurance?
Title insurance protects you from financial losses that could occur when the title to a property is not free and clear of defects. This insurance also protects you from the costs, attorney’s fees, and expenses of defending against a matter insured by the policy.
What is not covered under a title insurance policy?
There are certain risks that are not covered under a title insurance policy. For example, anything found during your property’s inspection.
Does the buyer or the seller pay for title insurance?
This is actually negotiable. We’ve even seen the buyer and seller split the cost of title insurance. Both parties benefit from title insurance, but in most cases we see the buyer purchase the title insurance because their investment is at risk.
Why should someone purchase title insurance?
Title insurance provides protection and coverage for future claims or losses from title defects such as previous owner’s debt, liens, and other claims of ownership. It’s not as straightforward as car or health insurance, so here are a few examples of common title insurance claims:
lines of equity are still open on the property
fraud
lost or forged deeds, satisfactions, or power of attorney
claims of missing heirs or conflicting wills
impersonation of someone
inappropriate execution of the title or clerical errors
contracts signed by minors or mentally Incompetent persons
confusion of title resulting from similar names
issues with the closing itself
priority disputes due to foreclosure and/or bankruptcy
tax and water bill errors
etc.
What’s the difference between owner’s and lender’s insurance?
Owner’s title insurance is protection against the clear ownership of a property while lender’s title insurance protect against lender’s loss. A lender’s policy provides no coverage or benefit for the buyer/owner. The decision to purchase an owner’s policy is independent of the lender’s decision to require a loan policy.
What are the benefits of owner’s title insurance?
protects entire ownership claims
protects against attorney’s fees
one-time fee with no expiration or renewal fee
significant savings is purchased at, or within 30 days, of the closing with a lender policy
lasts as long as you own the property, and after the property is sold
never decreases in coverage
protection against legitimate title problems and fraudulent claims against the title
protection against Common Name liens
Closings
Do you offer closings after business hours?
Yes! We understand that it can be difficult to attend a closing during business hours. We do offer after hours closings at our office or at the location of your choosing. Just contact a member of our staff to arrange this closing.
What is closing protection coverage and is it necessary?
Closing protection coverage is offered in all Ohio closings involving title insurance. There are two components to a closing, the Title to the property and the handling of funds and documents. Closing protection coverage insures the handling of funds and documents and covers any loss caused by mishandling of money and/or documents and is an indemnity policy. There are a lot of opinions on the subject, but we urge our clients to do their research and decide what kind of risk they are willing to take in regards to closing protection. We are always happy to discuss this and help you weigh your options.
Do you offer remote closings?
We are licensed to perform remote notary closings. If you can’t attend an in-person closing, contact us to arrange a remote closing that’s official and secure.
Are remote closings secure?
We understand that e-signing for such an important transaction can feel scary. We take safety and privacy extremely seriously. Our remote closings follow safety and security protocols and are on par in these areas with our in-person closings.
How do I need to prepare for a remote closing?
You’ll need access to a device that allows a video call with audio and video. You’ll be asked to answer a few security questions and take a picture of your I.D. After reviewing all of your closing documents you’ll be able to virtually sign all necessary documents.
Can Prodigy handle HUD closings?
Yes! Buyers have the right to choose their own title agent for HUD sales and Prodigy Title is approved to handle these closings. If you need a HUD closing, please use this form. If you’re given a form from a different HUD company, use the information from our form or email us the form and we’ll be happy to help. Prodigy’s Title’s Buyer Select Number is Prodig0001.
How should buyer’s funds be prepared for a closing?
According to the Ohio Good Funds Law, funds for closings over $10,000 must be sent to us via a wire transfer. The buyer should contact our office by phone for wiring instructions! Anyone in our office can provide this information. The buyer will need to provide their bank our wiring instructions to have the funds wired successfully for closing. The buyer should contact their bank to inquire about their wiring procedures. Many banks require an in person meeting to initiate a wire. We recommend that wires be sent at least one business day prior to the closing to avoid any delays. Funds between $1000 and $10,000 must be in the form of a cashier’s check payable to Prodigy Title or can be sent via a wire transfer. Funds under $1000 can be a personal check payable to Prodigy Title.
Why was closing protection coverage created?
Title agencies handle a lot of money. They have significant safeguards in place to protect the funds, but are not required to have reserves of any significance. Therefore, if their escrow amount runs short for any reason, the agency could immediately become uncollectible or insolvent. Title Underwriters, who are the companies that back the title policies, have reserves in the billions of dollars. However, they do not have a duty to assist title agents. Closing protection coverage was created to allow the Underwriter to offer the additional coverage with an added charge. A client can take advantage of an Underwriter’s reserves by purchasing Closing Protection Coverage, and never have to worry about an agent’s ability to deliver good funds.
Misc.
What could lead to title agents having money problems?
Issues include error, fraud, theft, misappropriation, or failure to follow written lender closing instructions as well as accepting fraudulent checks, computer viruses, and hackings.
What’s Dower?
Dower is a spouse’s possible interest in an owner’s land. Ohio and Kentucky are Dower states, meaning a spouse is required to sign in order to release Dower (except on cash purchases) even though they don’t own the property and are not on the loan. Dower kicks in and attaches the land when an owner dies. Because death is uncertain, the spouse’s Dower could attach at any time. If a married person signs a mortgage without their spouse, then dies, the Dower interest can be claimed in front of the Bank’s claim on the property. Read more about Dower here.
How are seller’s proceeds handled?
Seller proceeds will be paid by Prodigy Title’s Escrow check unless instructed otherwise (we cannot obtain cashiers checks for proceeds). If proceeds need to be wired, sellers should send our processor the wiring instructions or have the wire instructions sent by the title company handling their purchase. There is a $49 wire fee deducted from the proceeds.
What fees does a lender’s policy pay?
Lender’s policies pay lender’s attorney’s fees and expenses but do not pay any owner’s attorney’s fees.
How can a seller protect themselves when agreeing to extensive repairs?
We have seen scenarios where a seller completes extensive repairs (think $10,000 and up) requested by the buyer, then the buyer backs out of the contract. One way a seller can protect themselves would be to ask the buyer to increase their earnest money when the seller is taking on a large additional expense/risk. This makes the buyer more invested (but still in earnest money), so if the work is not completed properly, the buyer has leverage to get it done right.
Do you need GAP title insurance?
There is usually a period of time after the closing where the deed is not yet recorded. During this time, the seller can have liens or other items filed that affect the buyer’s title. This period of time (from the closing to the recording) is called the GAP. It’s important to know that the GAP is already a covered risk in the 2006 Policy Forms so there is no need for an extra fee for coverage. The GAP is a covered risk in #10 on the Owner’s Policy and #14 on the Lender Policy. Don’t let someone try to sell you something that’s already included. Of course, if they don’t get the owner’s coverage, the GAP period is a risk the buyer takes on themselves.
Can a buyer get out of the contract if the seller failed to repair the agreed-upon repair terms?
These situations can get confusing, so it’s important to make sure the contract states what you expect. Here’s an example: The contract language states the seller agrees to repair the items or to credit the buyer for the items. When both parties spoke, the seller agreed to hire contractors to do the repairs, but just before the closing the repairs were not complete. The seller said he would credit the buyer instead, escrowing money for the repairs. Because the buyer and the lender expected the repairs to be completed, they were not prepared to switch to a seller credit or escrow for repairs. Because of the contract language, the problem falls upon the buyer because the seller is willing to perform according to the contract terms. If the seller agrees to the repairs, change the contract to state sellers repairs, and remove the option to credit the buyer. In contract negotiations, things move fast! Be sure to slow down and double-check the language to make sure there isn’t “wiggle room'“ for the other party. We always recommend having another person review the language to make sure it says what you understand it to say.
What do I need to do when listing a property for a recently widowed seller?
To prevent delays in your closing you need to determine how the seller held title. If the title was held in survivorship, you can have the seller sign the listing agreement and contract. Make sure they have a death certificate (not just a copy) for the title agency to attach to a survivorship affidavit and clarify if they ever got a divorce. Divorce can remove their survivorship status. Remember, a divorce may not take place in the same County as the property, so it may not be found in the title exam. If there is not a survivorship deed, an estate will need to be started right away to determine what kind of delay there may be and who is authorized to sign your contract. It’s always a good idea to see if they have copies of their title deeds. If you’re unsure about what you’re looking at, feel free to email me and I’ll take a look.