Title Insurance is a relatively new concept in Canada. Simply put, Title Insurance insures over defects in title that might otherwise prevent a transaction from closing. It is recognized and accepted by every major Canadian financial institution.

Title Insurance is a valuable tool for every real estate professional because it not only insures over specific known title and survey problems, it also protects against solicitor and borrower fraud. Forgery and unknown title problems that could affect your client's interest in a property. But the primary benefit of title insurance for REALTORS is that it can eliminate many closing delays and cancellations caused by title defects.

REALTORS are justifiably concerned about delays in closings. Everyone wants a closing to take place on time and in an orderly manner. By obtaining a title insurance policy, in many situations, problems which prevent a deal from closing can be resolved.

For example, in situations where there is not and up-to-date survey, or where the survey does not show a deck or an alteration, title insurance can save a purchaser several hundred dollars on the cost of financing. As well, a new survey can often identify technical or minor problems which could potentially cause further delays to the closing. Title insurance, in addition to eliminating the survey cost, can eliminate the time it takes to obtain a survey and the costly delays in resolving relatively minor issues.

Both of these are critical issues when the lender's request for the new survey occurs two to three days before closing. If that happens, the real estate professional can advise their client's solicitor to contact First American Title Insurance to order the title insurance policy. The policy can usually be issued the same day.

First American Title Insurance, the largest title insurer operating in Canada, has assets in excess of eight hundred million dollars and annual sales in excess of one billion dollars. They are highly regarded in the United States and have made significant in-roads in Canada and most lenders will now accept a title insurance policy from First American in lieu of a new survey. This allows your client to purchase a $200 policy rather than an $800 survey. The premium is a one-time premium and applies for mortgages up to $500,000. For loans above $500,000, there is a sliding-scale premium.

Real estate professionals can also use title insurance to solve problems discovered at the listing stage. For example, in instances where there is an undischarged mortgage that is in fact paid out, or if there is in fact paid out, or if there is an encroachment onto a side yard set-back. The listing agent can indemnify the subsequent purchaser against any future losses that might occur due to the problem. The commitment can usually be issued within a few days.

Many Realtors feel that the problems described are ones that should be solved by the solicitor. As professionals, it is your obligation to provide reasonable and sound advice to your client in all circumstances. It is a mistake to think that all solicitors know about title insurance. In fact, although well over 2,000 solicitors have already used title insurance in Canada. Many solicitors are not aware of how the title insurance program works to solve the real estate professional's day to day problems.

As seen in Today's REALTOR.