Frequently Asked Real Estate Title Questions

Michigan Title for Real Estate by BBC Title

Below is a list of compiled questions that are usually asked by our customers. We have answered and posted them here for your benefit and aid in answering your questions. If your questions are still not answered here, please feel free to contact us.


What is a real estate title?

Why is transferring the title to real estate different from transferring the title to other items, such as a car or mobile home?

What is a title search for real estate?

What kinds of problems can a title search reveal with a property?

Are there any problems that a title search cannot reveal about certain real estate?

What is title insurance, and why do I need it?

How much could I lose if a claim is filed against my property?

How does title insurance protect my investment if a claim should arise from a past real estate transaction?

The owner of the property has a deed that they received when they purchased the property. Isn't that proof of ownership?

What about an attorney's opinion? Should I have one during the title search and closing of my real estate purchase?

The owner of the property I want to purchase has lived in the home for only six months. He had title insurance issued six months ago. Why do I need it again?

If the builder of my home already has title insurance on the property, why do I need it again when I purchase the land from him?

Are there different types of title insurance policies?

How much does title insurance cost?

How long does my coverage last?

Where can I get title insurance?




What is a title?
A title is the foundation of property ownership. It is the owner's right to possess and use the property.

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Why is transferring the title to real estate different from transferring the title to other items, such as a car or mobile home?
Because land is permanent and can have many owners over the years, various rights in land may have been acquired by others (such as mineral, air or utility rights) by the time you come into possession of it, even if the land has never before been built upon. So in order to transfer a clear title to a piece of land, it is first necessary to determine whether any rights are outstanding.

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What is a title search?
A title search is a detailed examination of the historical public records concerning a property. These records include deeds, mortgages, property and name indexes and any other documents recorded that relate to the property. The purpose of the search is to verify that the Seller you are buying from has the right to transfer the property to you, and to discover any liens, claims, defects and other rights or burdens on the property.

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What kinds of problems can a title search reveal?
A title search can show a number of title defects and liens, as well as other encumbrances and restrictions. Among these are unpaid taxes, un-discharged mortgages, judgments against the seller and restrictions limiting the use of the land.

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Are there any problems that a title search cannot reveal?
Yes. There are some hazards that can remain hidden even to the most diligent title searcher. For instance, the previous owner could have incorrectly stated his marital status, resulting in a possible claim by his legal spouse. Other “hidden hazards” include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names and clerical errors in the records. These defects can arise after you've purchased your home and can jeopardize your right to ownership.

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What is title insurance?
Title insurance is your policy of protection against loss if any of these problems – even a “hidden hazard” – results in a claim against your ownership. A title insurance policy is a policy of indemnification.

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How much could I lose if a claim is filed against my property?
That depends on the claim. In an extreme case, you could lose your entire home and property – and still be liable to pay off the balance of your mortgage. Most claims aren't that dramatic, but even the smallest claim can cost you time, money and aggravation, and you may have to pay costs for a legal defense.

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How does title insurance protect my investment if a claim should arise?
If a claim is made against your property, title insurance will, (if coverage applies to the claim) in accordance with the terms of your policy, assure you of a legal defense – and pay all court costs and related fees. Also, if the claim proves valid and no other equitable solution or settlement can be achieved, you will be reimbursed for your actual loss up to the face amount of the policy.

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The owner of the property has a deed that they received when they purchased the property. Isn't that proof of ownership?
Not necessarily. A deed is just a document by which the right of ownership in land is transferred, whatever that right may be. It's not proof of ownership, and it doesn't do away with rights others may have in the property. In addition, a deed won't show you liens or claims that may be outstanding against the title.

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What about an attorney's opinion?
An attorney's opinion is based on a search of the public records. So, once again, even the most exhaustive search of these records may not reveal everything. Unlike a title insurance company, an attorney is not liable if you should suffer loss because of “hidden hazards” in the title.

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The owner of the property I want to purchase has lived in the home for only six months. He had title insurance issued six months ago. Why do I need it again?
Because the owner could, in a very short time, do many things to encumber the title. For example, he could grant easements or construct improvements that encroach on adjacent property. He could get married or divorced, or have a lien filed against the property. It is necessary to conduct an up-to-date search to uncover any such problems and have a title insurance policy issued to cover you specifically in the amount of your purchase price.

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If the builder of my home already has title insurance on the property, why do I need it again when I purchase the land from him?
A title policy insuring the builder does not protect you. Also, a great many things could have happened to the land since the builder's policy was issued. Liens, judgments and unpaid taxes for which prior owners were responsible may be disclosed after you purchase the property – causing you aggravation and costing you money.

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Are there different types of title insurance policies?
Yes. Basically there are two commonly used types of policies – a loan policy and an owner's policy. The loan policy protects the lender's interest in the property as security for the outstanding balance under the buyer's mortgage, during the life of the loan. The owner's policy safeguards the buyer's investment or equity in the property up to the face amount of the policy. (Title insurers in many states offer increased policy coverage through inflation endorsements to cover increases in value due to inflation.)

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How much does title insurance cost?
Probably less than you think. Charges vary in different sections of the country, but generally the cost of title insurance includes the search, examination and related services. In Michigan , the rates for all areas are filed with the Insurance Commissioner and each agent and underwriter must adhere to the filed rates. Unlike other insurance premiums that must be paid annually, a title insurance premium is paid one time only for each buyer and each new mortgage.

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How long does my coverage last?
For as long as you or your heirs retain an interest in the property and, in some cases, even beyond.

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Where can I get title insurance?
From any licensed title insurance company or its agents operating in Michigan . If you are obtaining financing to purchase a home, your lender may be involved in ordering the required title work. If you are working with a real estate broker or salesperson, they will likely be ordering the title work for your transaction. If you are working with an attorney or a professional closing service, their offices will typically take care of getting the title insurance for your closing and in all cases, you will simply be charged for the premium on your closing/settlement statement.

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This data is intended for informational purposes only. Your title insurance policy contains terms and conditions that may limit or restrict coverage. Consult your attorney for specific advice regarding your legal rights and consult your real estate professional when selling or purchasing a home or property.