An abstract is a written legal document that summarizes the history of real property. Every time property is exchanged, abstracts are updated to ensure the legal record of ownership is documented.
Abstracts are important for all land transactions in Iowa. Accuracy is extremely important and errors can be very costly, which is why choosing a meticulous abstractor is very important.
A deed is a written contract between a seller and a purchaser. The seller is known as the “grantor”, and the purchaser, the “grantee”.
(a) Warranty Deeds, (b) Special Warranty Deeds, (c) Bargain and Sale Deeds also known as a Deed Without Warranty, (d) Quit Claim Deeds, (e) Deeds Issued by Judicial and Governmental Officials and (f) Deeds Made by Fiduciaries.
A title is what constitutes the rights of ownership to real property. Essentially it is what legally “entitles” an individual to the ownership of items such as farmland, homes, autos, boats, etc. Without a proper title, the ownership of real property may not be recognized and protected by law.
When buying and selling real property, a title search from public record must be conducted to determine what rights are included in a title and who owns it. It is a way to be certain a person has the right to sell property, and that a buyer is getting all of the rights to the property in the agreement.
A chain of title is a simple history of when and who bought a piece of property.
A tax search is conducted to verify the current status of real estate taxes held against property. The search also indicates the existence of special assessments held against land.
The Iowa Legislature created Title Guaranty to provide guarantees of Iowa real property titles, facilitate mortgage lenders’ participation in the secondary market, and to help assure the integrity of Iowa’s land-title system. As a division of the Iowa Finance Authority, Title Guaranty is totally self-supporting. All revenue in excess of operation expenses goes toward home ownership programs for first-time home buyers. Title Guaranty’s profits are re-invested in the state of Iowa.
Title Guaranty offers Commitments, Certificates, and Endorsements that provide low cost title protection for real estate located in Iowa. Title Guaranty issues coverage based on an abstract and attorney title opinion. Once a participating abstractor prepares an abstract, a participating attorney reviews and then issues a title opinion or Title Guaranty Commitment. All Title Guaranty Commitments, Certificates and Endorsements are issued using the industry standard ALTA forms. For a residential transaction, coverage up to $500,000 is just $110 and an additional $1 per thousand over $500,000. Most common endorsements are offered at no charge. For a non-purchase residential transaction such as a refinance or second mortgage, the premium is just $90 for coverage up to $500,000. As of April 1, 2007, Title Guaranty provides FREE Owner’s Coverage when issued in conjunction with Lender’s Coverage.
During a title search, one of the key factors is determining if there are any unsatisfied judgments against the seller or previous owners. A judgment is a general lien against real estate and gives security for any money owed under the judgment. Property may be sold in order to satisfy judgments.
Name searches are performed to determine that proper names exist on a title.
Once all defects in a title are cleared up, the buyer, seller, and possible lender may proceed with the closing of a transaction. Lenders are just as concerned with the quality of a title as the buyers because the property is security for the balance of a loan.