Resources
Q: Why Do I Need Title Insurance?
A: An Owner’s Policy of Insurance protects you as a purchaser of real estate against title defects that may exist on the property you are buying. A Lenders, or Loan Policy, insures the lender as to the priority of its lien, meaning there are no other mortgages, liens, or judgments recorded prior to its mortgage.
Q: What is a Title defect?
A: Judgments, liens, unsatisfied mortgages, unpaid taxes, and restrictions limiting the use of the land are just a few of the most common title defects that can be discovered by a thorough search of the public records. Title insurance also protects against some of the hidden defects that a thorough search of the public records cannot reveal, such as fraud and forgery, deeds by minors or persons of unsound mind, or undisclosed or missing heirs.
Q: What does Title Insurance cost?
A: In Michigan, rates are set and regulated by the Michigan Office of Financial & Insurance Regulation and are based upon the sales price or mortgage amount. However, Peninsula Title Agency uses three of Michigan's largest underwriters allowing us to give you the best rate possible. Please contact us at peninsula@pentitle.net for a detailed quote.
Q: How long am I covered?
A: Your owner’s title insurance policy lasts for as long as you or your heirs own your property. Your life will change over time, but your peace of mind never will.
Q: Who pays for it?
A: Generally, local customs in the area determine who pays for the title insurance and other closing costs. However, it is always negotiable between the parties in a purchase transaction. This should be addressed in the Purchase Agreement.
Q: Who chooses the Title provider?
You! Whether you are selling, buying, or refinancing, YOU have the right to choose your title provider. Tell your real estate agent, attorney, or loan representative that YOU want to choose Peninsula Title Agency. We are local, community based, and have a solid financial history.
Q: How long does it take?
A: We strive to provide you with your Commitment for title insurance in 24 hours or less. Upon receiving that, contact us to set up your closing date and time. We will always try to meet your closing date needs.
Q: Do I need to close at your location?
A: No. We can have your closing documents sent to you by overnight courier or email, to an affiliated title company, or to your bank for you to sign and have notarized. Let us know your situation and we will accommodate your needs.
Q: What happens at the closing?
A: Ownership of the property is transferred, title insurance is issued and coverage begins. CLOSING COSTS usually add up to 6% or more of the purchase price. Depending on the state and local laws, you may have to pay:
• TITLE COSTS: Fees for the title search and he lender’s title insurance. Your own title insurance is an additional fee.
• LOAN CHARGES: Including origination, appraisal and survey fees.
• SETTLEMENT FEES: Fees for the lender's agent (usually, a lawyer or a title or escrow company representative). You may want your own lawyer in addition.
• TAXES AND GOVERNMENT FEES: Transfer taxes, buyer’s share of yearly property taxes.
Q: Who should receive the monetary proceeds of a sale or refinance?
A: In general, the proceeds of a sale should be distributed to the seller and record owner of the property. For a refinance, the loan proceeds should be distributed to the borrower as named on the loan instructions or note.
Q: Why is it important to distribute proceeds to the owner or borrower of record?
A: Distributions to the party of record are necessary to ensure that proper IRS reporting requirements have been met. Additionally, neither the settlement agent nor the underwriter should be making legal determinations as to whether the entity documents permit distributions to another party, particularly when the seller or borrower is a trust. If there is a new loan being issued, the lender may not permit loan proceeds to be distributed to a party other than the owner of record.
Q: When is it acceptable to distribute proceeds to a party that is not the owner of record?
A: The proceeds could be transferred to another file or title company for the party of record to use to purchase another property. Funds could also be transferred to a 1031 Exchange Company. Funds could be transferred to an asset manager who has written authorization to accept proceeds on behalf of the owner. The loan instructions also could state that the settlement agent is to pay another party besides the borrower.
Q: What if the owner of record seeks to assign the proceeds of the sale or loan to another party?
A: Settlement agents should be wary of agreeing to distribute proceeds based on an assignment from the party of record. As an alternative, the settlement agent could pay proceeds to an attorney trust account based on written instructions from the party of record. Those funds can then be further distributed by the law firm.
Q: Where should proceeds be distributed when there are multiple owners of record?
A: Settlement agents can cut checks separately in the name of each individual seller or borrower with written authorization from those parties. Conversely, multiple sellers can assign the proceeds to just one seller.
Q: Any questions we haven't answered yet?
Please feel free to contact us at peninsula@pentitle.net
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Jointly Owned Property
Michigan has four ways that you can jointly own property:
1) Tenants by the Entirety Tenants by the entirety is a form of joint ownership in Michigan available only to married couples. Each spouse has an undivided interest in the property and upon the death of either spouse, the surviving spouse would become the sole owner of the property. If property is conveyed to spouses who were married at the time, a tenancy by the entirety is created, with or without the tenancy by entirety language being mentioned.
2) Joint Tenancy In a joint tenancy, two or more individuals hold an equal share of 100% of the property. A conveyance to two or more individuals must specifically mention the joint tenancy. Upon the death of a joint tenant, the interest passes to the surviving joint tenant or tenants. A joint tenancy can be severed by one or more of the joint tenants if they sell their interest in the property. The grantee in this conveyance will then become a tenant in common with the remaining joint tenant or tenants. For example: If Amy, Brian, and Cindy own a property as Joint Tenants and Amy conveys her interest to Dave, then Dave owns a 1/3 interest in the property, with Brian and Cindy, as remaining joint tenants, as to the remainder.
3) Joint Tenants with Full Rights of Survivorship Similar to a Joint Tenancy, but with the additional language of with rights of survivorship or with full rights of survivorship, Joint Tenants with Full Rights of Survivorship creates a different situation should a joint tenant sell or convey their interest. For example: If Amy, Brian, and Cindy own a property as Joint Tenants with Full Rights of Survivorship and Amy conveys her interest to Dave, then Dave would only receive full interest in the property should Brian and Cindy predecease Amy. If Amy predeceases either Brian or Cindy, then Dave would receive no interest in the property.
4) Tenants in Common When two or more individuals hold title as Tenants in Common, they each hold an undivided interest in the property which they can sell or transfer independent of the other tenants. Upon the death of a tenant, their interest passes to their heirs or beneficiaries of their estate, and not to the other tenant or tenants. If two or more individuals hold title and there is no tenancy reference, such as joint tenants or joint tenants with rights of survivorship, then it is presumed to be a tenancy in common. For example: If Amy, Brian, and Cindy own a property as Tenants in Common and Amy conveys her interest to Dave, then Dave owns a 1/3 interest in the property with Brian and Cindy also each owning 1/3. If either Dave, Brian, or Cindy should pass away, then their respective 1/3 interest would pass to their heirs or beneficiaries.
Consider Consulting an Attorney How a surviving owner holds title can have certain ramifications when dealing with Medicare/Medicaid or probate situations therefore it is always recommended that you speak with an attorney when deciding the tenancy of a jointly owned property.
Peninsula Title Agency Helps You Protect Your Money
From Wire Fraud Schemes When Buying a Home
Every day, hackers try to steal your money by emailing fake wire fraud instructions. Criminals will use email addresses similar to a legitimate business name and send a logo and other info to make it look like the email came from your real estate agency or title company. You can protect yourself and your money by following these steps:
Be Vigilant
• Call don’t email: Confirm your wiring instructions by phone using a known number before transferring funds. Don’t use phone numbers or links from an email.
• Be wary: Avoid free, web-based email accounts unless you can verify they are secure; otherwise, these types of accounts are easily hacked.
• Carefully evaluate Instructions: Watch out for any requests for secrecy or pressure to take action quickly.
Protect Your Money
• Forward, don’t reply: When responding to an email, hit forward instead of reply and then start typing in the person’s email address. Criminals use email addresses that are very similar to the real one for a company. By typing in email addresses you will make it easier to discover if a fraudster is after you.
• Confirm everything: Ask your bank to confirm the name on the account before sending a wire, as well as changes in payment instructions and requests for transfer of funds.
• Verify Immediately: Within four to eight hours, call the title company or real estate agent to confirm they received your money.
What to do if You’ve Been Targeted
• Immediately call your bank and ask them to issue a recall notice for your wires.
• Report the crime to www.IC3.gov
• Call your regional FBI office and police
• Detecting that you sent money to the wrong account within 24 hours is the best chance of recovering your money.
Peninsula Title Agency Keeps You Safe from Fraud
By partnering with CerfifID Match to verify your identity
Why you need to verify your identity
Scams are a risk in all corners of our lives, and real estate is no different. If you’re a homeowner, buyer, or seller, you deserve to know that your real estate professionals are keeping you safe during a transaction. With a selfie and scan of your ID card, you can quickly complete the identity verification step that is increasingly becoming standard practice in any safe real estate transaction.
Why we partner with CertiflD
CertiflD is the nation's leading wire fraud prevention solution. CertiflD helps verify your identity securely, prior to exchanging sensitive banking information, so you have peace of mind when transferring your money.
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