An Abstract of Title is a formal written summary of legal documents found on record at the Office of the County Clerk for the county in which your property is located. The document often is a rather thick set of papers bound together by a metal fastener at the top with a colored, heavy stock paper backing.
Traditionally, in this area of upstate New York, attorneys representing purchasers or lending institutions have relied upon a reading of this document to determine whether a seller (or borrower) has a good legal interest in the lands to be conveyed (or mortgaged) free from judgments, liens, or boundary disputes. In upstate New York (north of Greene County) it is the seller's obligation to deliver to the attorney for the buyer and bank a currently dated Abstract of Title to be reviewed to determine the property owner has clear title to convey or mortgage. The abstract then is delivered to the buyer sometime after closing. If the seller has taken back owner financing, often the abstract is held by the seller or the seller's attorney until the owner financing has been paid in full. If you cannot locate your Abstract of Title, check with the attorney who represented you at closing or the attorney for the bank, seller, or title company that insured your last transaction.
If you are obtaining a mortgage loan, most likely the bank providing mortgage financing will require that you purchase for the benefit of the bank a Mortgage Title Insurance policy. Mortgage Title Insurance guarantees to the bank that it will have a valid first mortgage lien on your property free from the claims of others. Unless you request otherwise, we will place an order for Mortgage Title Insurance on your behalf through Cooper Country Abstract, a title insurance agency owned and operated by our law firm. The title insurance premium will be paid at closing. Since title insurance premiums are regulated by the State of New York, they are the same regardless of the title insurance company with which the order is placed.
For an additional premium you may purchase Owner's Title Insurance which protects your interests in the property. Owner's Title Insurance is nearly universal in larger metropolitan areas and in most other states. If you are paying cash for property without owner or bank financing, we recommend Owner's Title Insurance to protect your investment. If you are having the property surveyed or are having the existing survey re-certified to you, we also recommend Owner's Title Insurance since it will guarantee your surveyed boundaries and provide you with a legal defense should any party challenge those boundaries or assert a legal interest in your property. Without a new survey, however, Owner's Title Insurance provides you with less protection since the policy will contain an exception from coverage for any "state of facts an accurate or currently dated survey would have disclosed."
Owner's Title Insurance is optional but provides significant benefits when coupled with a new updated survey. You should speak directly with your attorney if you have further questions regarding title insurance. You will be offered the opportunity to purchase Owner's Title Insurance at closing. If the Owner's Title Insurance policy is purchased within 10 days of your purchase of Mortgage Title Insurance, you will be entitled to a discounted premium.
If you are subdividing or constructing a new home on your property, the town and/or lending institution likely will require you have your property surveyed by a licensed surveyor. The survey must be certified to you, the bank, and the title insurance company. Otherwise, a survey is optional. In this area, the cost of a new survey can vary between $500.00 and $2,000.00 depending upon the size of the parcel to be surveyed. We would be happy to provide you with the names of surveyors with whom we have worked over the years. Without a new survey, the deed to your property will contain what is known as the "historic description," being the same description your sellers received in their deed when they purchased the property. Sometimes these "historic descriptions" carry forward surveyed descriptions from the early 1800's and are as detailed and reliable as a new survey would be. Other historic descriptions are more vague and may attempt to transfer property interests by reference to the names of adjoining neighbors or physical land marks which may no longer exist, such as "bounded on the north by Smith, the south by Jones, the east by the western wall of Aunt Mabel's old dairy barn...." If we encounter such a description, we will likely suggest you consider purchasing a new survey.
Please do not schedule final moving arrangements until you first have checked with our office. Any proposed closing date in the contract of sale is a target date and cannot strictly be enforced unless time specifically has been made "the essence of this contract" with respect to the closing date. Absent such a provision, your actual closing could occur a week or more after the closing date set forth in your contract. If you are obtaining a mortgage from a lending institution, we will not be able to schedule the closing until the lender has released the loan for closing and the Mortgage Title Insurance has been completed. If this would present a problem, please call your assigned paralegal immediately to address your concerns.
If you are obtaining financing you should receive a commitment or approval letter from the lending institution. The letter will contain the terms of your loan as well as additional information or conditions that the bank requires from you before the loan will be released for closing. You must take responsibility for the items listed. If you have any questions regarding the requests, please contact your lender, mortgage broker, or assigned paralegal.
Please contact your insurance agent as soon as you receive your approval or commitment letter from your lending institution. The letter will provide the insurance agent with the lender's requirements for the hazard insurance coverage. The policy must insure the premises against loss for at least the dollar amount of your mortgage loan. The policy should be made effective as of the date of closing. The agent will be notified as soon as a closing date is set so the binder can be completed showing the effective date. In addition, if this is a new policy, you must pay the first year's premium in full prior to closing. To avoid any delay, the agent must fax a copy of the binder and the receipt to us as soon as possible after a closing is scheduled. Most lending institutions require we provide them with a copy of the homeowners insurance binder and a copy of the paid receipt for the first year's premium at the time that we order the mortgage closing documents. If you are refinancing and have an existing homeowners policy, we still will require a binder from your agent as well as a statement that includes the amount of the current annual premium, that the current premium has been paid in full, and the renewal date of the policy.