What does “title to real estate” mean?

Think of title to real estate as your exclusive right to own and possess the land you buy.  A defect in the title to your land means that someone other than you (the owner) may claim a competing right or interest in your land.

What can cause a defect in title?

• A past deed conveying title to your home may have described the wrong property, or was not properly witnessed or notarized.  Or the deed was not signed by all necessary parties, such as a spouse, co-owner or legal heir of a past deceased owner. 

• A deed conveying title to your land was not recorded.  To convey good title, a deed must be registered in the county land records where the property is located. 

• Prior documents affecting your home’s title, such as deeds, mortgages, and lien releases were signed by someone without legal authority to execute them, or they were prepared incorrectly rendering them invalid or voidable.

• Documents, including deeds, are sometimes signed under a Power of Attorney, which must also be recorded in the county land records.  If a Power of Attorney was not recorded, or did not grant the proper authority to act, or was expired when used, the document executed under that Power of Attorney may be invalid.

       •   A past deed, mortgage, or lien release was forged or signed under duress.

• A past mortgage, judgment, or tax lien was never released, or was released incorrectly, giving the creditor or taxing authority the right to attempt collection of a past owner’s debt by demanding payment from you, or forcing you to sell your home.

What does title insurance do for me?

Title insurance protects you against title defects that occurred before you bought your home.  The policy that protects you (the owner) is the Owners Title Policy, and it remains in effect for as long as you or your heirs own the property.  If you mortgage your home purchase, your lender will require that you buy a separate Lenders Title Policy to protect its collateral, your home.  The Lenders Title Policy remains in effect only as long as the specific mortgage insured by the policy remains a lien on your property.  That’s why, if you decide to refinance, you must buy another Lenders Title Policy (at a reduced premium) – even if you use the same lender.  After a refinance, your Owners Title Policy continues in effect.

Who pays for my title insurance policy?

Typically you, the homebuyer, pays for the policies that protect you and your lender.

HOMEBUYERS INFORMATION SHEET                                                        

Who actually orders my title policy?

In New Jersey, local custom dictates who orders your title insurance.  In some parts of the state, it is your attorney.  In others, it is your real estate agent.  Other times, your mortgage lender or builder (if you’re buying a newly constructed home) orders title insurance. 

If I can choose my mortgage lender, my home inspector, and my homeowners insurance agent, why can’t I choose my title company?

You can, and should choose your title company.

Most New Jersey title companies do not market directly to homebuyers.  They view their customer as the real estate agent, attorney or loan officer who places the order for title insurance.  Colonial Title takes a different approach.  At Colonial Title, we believe YOU are the customer.  Why?  Because the title policy protects you and your lender, and you are the one who ultimately pays for those policies.  Not the agent, not the attorney, not the broker – but you, the homebuyer. 

Title insurance rates are strictly regulated by the New Jersey Department of Banking and Insurance.  The higher your home’s purchase price, the higher your title insurance premium.  One title company cannot charge more than another for the same insured amount.  Unlike homeowners insurance, a policy you pay for every year, you pay for title insurance once, usually at closing.

How can I save money on title insurance if I enroll in Colonial Title’s Partnering with Homebuyers program?

If you choose to participate, Colonial Title pays you an advertising fee for placing a small sign in a window or on the lawn of your new home (where allowed by law) that tells people who insured your home’s title.  The advertising fee is based on the purchase price of your home.  The higher the price, the greater the fee.  The advertising fee will be paid to you at closing in the form of a credit on the title insurance invoice.  You are asked to display the sign for three weeks from the date you close or move in.  Here are some examples of how much you can save:   

Purchase                    Title                            Advertising              
Price of                      Insurance                  Fee Paid to               
Your Home               Premium                   Homebuyer 
                                               
$200,000                     $   895.00                    $250.00                      
$400,000                     $1,685.00                    $300.00
$800,000                     $2,875.00                    $350.00

Tell me more about Colonial Title.

Based in Morris County, Colonial Title and Abstract Service, LLC is one of the largest title insurance agencies in New Jersey.  Insuring homebuyers and homeowners in all 21 counties for over 30 years, the agency’s three owners, Eugene J. Riesebeck, Michael Grant and Sal DeStefano, have a combined total of over 100 years of title industry experience.