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First American Corp.

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Q & A

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BUYERS Q & A | SELLERS Q & A | ESCROW Q & A


	Questions & Answers for BUYERS

Now you can buy property without sending money to a stranger or worrying about the title. Simply let First American hold the deposit, check everything out for you, and — if you decide to go through with the purchase — insure your title to the property.

Frequently Asked Questions

How does title insurance protect me? How does the Preliminary Report help me? How does Escrow protect me? What is a title search? What should I look for in a Preliminary Report? What does title insurance cover?
How does Title Insurance protect me? With First American Title Insurance, you are protected in two ways. First, we literally insure you against loss from problems that arise due to past events that can either cloud the title (such as an owner who did not agree to a sale) or give rise to claims (such as a contractor who was not paid). Also, because we thoroughly research the property’s title history before underwriting the policy, the risk that surprises will later be discovered is dramatically reduced.
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How does the Preliminary Report help me? The Preliminary Report helps you better understand the property you are buying. It contains a legal description of the property and, in some cases, an informational plat map, plus vital information on the current ownership of the property, the manner in which the current owners hold title, and matters of record that specifically affect the property or the owners of the property. It also tells you about recorded deeds of trust or mortgages; agreements; covenants, conditions, and restrictions (CC&Rs); and other items that can affect the title. It is a report and statement of the type of title First American is willing to insure for that property.
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How does Escrow protect me? Escrow protects all parties to a transaction. For example, by holding the deposit, we protect the buyer, while the seller sees evidence that the buyer’s interest is in good faith. We hold all monies, instructions, and documents necessary to the transaction; make sure that the right amounts go to the right parties; and see to details such as recording the new deed. In other words, the buyer doesn’t give up the purchase money they have deposited in the escrow until they have a right to the deed conveying title to the property to them, deposited in the escrow by the seller.
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What is a title search? We work to eliminate your risks by performing a painstaking search of public records and our own files, where public records, laws, and court decisions pertaining to the title to the property and the parties to the escrow are maintained. We carefully review records in order to determine the current recorded ownership, any recorded liens and encumbrances, or other matters of record that could affect the title to the property. When we're done, we issue a preliminary report detailing the status of the title we are willing to insure.
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What should I look for in the Preliminary Report? Review this important document as soon as it arrives. (Or, if a thoughtful seller has already obtained one, get a copy and review it now.) Here are the main things to look for: Correct names — Be sure the names of the owners of the property shown in the report are the same as the names of the sellers of the property shown in the purchase contract. Sometimes the name of an unexpected owner will show up. For example, if you discover the name of a previous spouse of the seller or relative who died, corrective documents may be required. Correct address — The plat map, if any, and legal description should match the address. This is important because an owner could own two properties adjacent to or across the street from each other, causing confusion in identifying the correct property. Pertinent information — Read the informational notes for pertinent items about the property such as transfer taxes, monument fees, homeowners' association fees, etc. Title exceptions — Carefully review the exceptions, such as current taxes, bonds, deeds of trust or mortgages, assessment district items, CC&Rs, and easements. Make sure that none of the title exceptions interfere with your future plans for using the property. For example, an easement across the backyard could make it difficult to put in a swimming pool later. Surprises — If you see any item you weren't aware of call First American immediately. Problem-solving is what we do — and we go out of our way to quickly help you resolve any problems.
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What does title insurance cover? The title search can’t eliminate all the risks because certain “hidden defects” might not show up until later. A few examples: A forged signature on a deed Impersonation of the real owner Mistakes of others or changes in the interpretation of wills or other legal documents Deeds delivered without consent of the grantor Undisclosed or missing heirs Deeds and mortgages signed by persons of unsound mind,minors, or by persons supposedly single but actually married. These are just a few of the many title risks you won’t have to worry about with First American title insurance.
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