A land abstract can be thought of as a complete historical "book" related to an individual piece of land based on its legal description. It shows the entire chain of ownership transfers from the time the property title was first recognized by the government up to the present. This set of documents will also include any court items filed in the court clerk's office that pertain to either the property or the property's owner(s). Therefore, the abstract can be used to establish a "clear title" to a piece of property.

In the old days - before photo copiers - an abstractor read each document pertaining to a piece of property, made "takeoff" notes, then summarized them on a sheet of paper. This page would list all the pertinent information related to an item, such as a deed, by including the grantor, grantee, date of the deed, filing date, legal description, signature block, and notary information. The abstractor's page was then added to the "book" and called an abstract, because the information from the original deed was "abstracted" thus the name. The ability to pick through numerous pages of information and abstract the important details was considered an art form.

Today, when the abstract has been brought up to date, an abstractor will place a "certificate page" at the very end of the abstract. This page certifies the legal description of the abstract, Ad Valorum tax status, personal property tax status, and any other court items that fell within the time period covered by the certificate from the last certificate page to the present.

What is title insurance?

• It is the application of the principles of insurance to risks/hazards that exist in every real estate transaction.

How does title insurance differ from other types of insurance?

• Title insurance protects the insured from future losses arising out of events that happened in the past.

Are there several types of title insurance?

• Yes. There are three types of title policies. The first one is the owner's policy, which the buyer would need for his or her protection. The second one is the lender's policy (mortgagee's policy), which only protects the lender. A majority of the lending institutions require a lender's policy for each real estate loan.

What fees are associated with title insurance, and who is responsible for paying these?

• There are four steps necessary to get to the point of issuing a title policy (whether owner's, lender's or leasehold). The four steps are as follows:
• 1. Initial abstracting to update abstract for title examination;
  2. Title examination by an attorney to produce a title commitment;
  3. Final search to show recorded documents (from closing) in abstract;
  4. Collection of title insurance premium.
• Each of the first three above-referenced steps has a fee associated with it, and the party who pays for each of these is determined by the real estate contract.

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