Frequently Asked Questions

What is a title search?
What Closing Costs May a Buyer Encounter?
What are ALTI's Closing and Settlement Services?
Do I Need Title Insurance
What is Act 250?
Are There Different Types of Title Policies?
What is a HUD Settlement Statement (HUD-1)?
What is pro-ration of property taxes?
What is pre-paid interest?
What if there's a defect in the title which doesn't show up in the land records?
What is a title search?
A title search is a detailed examination of the historical records concerning a property. These records include deeds, mortgages, court records, property and name indexes, taxes and many other documents. The purpose of the search is to verify the property owner's right to sell or finance the property and to discover any claims or defects to the property. In Vermont, land records are kept in the Town Clerk's Office for the town in which the property is located. Vermont has 251 towns and American Land Title, LLC has been to most of them! The title examiner actually travels to the town in question to perform the search, which includes determining the following:
  • Chain of Title: This is a history of ownership of property. The chain of title lists all of the parties (links) that have had any recorded ownership interest in the property during the period of time covered by the search.
  • Liens and Encumbrances: Any documents recorded in the land records relevant to the property, including judgments, court orders, mortgages, claims, easements, rights-of-way, Federal, State or Local Permits and tax liens are reviewed to determine whether or they constitute a lien or encumbrance affecting the marketability of title to the subject property.
  • Taxes and Assessments: Any real property taxes, municipal assessments (water, sewer, fire district charges, etc.), condominium assessments (if any) that relate to the subject property will be determined and handled as needed at closing (e.g., paid off or prorated).
  • Title Insurance Commitment: After the title search is completed, the information is compiled in a Title Insurance Commitment. The Commitment contains the terms which must be met in order for the company to issue a title insurance policy. If a lender is involved, the Commitment is provided to both the Lender and the Borrower. The Lender is interested in the quality of title because the property will be security for the new loan.
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What Closing Costs May a Buyer Encounter?
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What are ALTI's Closing and Settlement Services?
  • If American Land Title, LLC conducts the closing, it will act in a fiduciary capacity. The Closing will occur at a time and location convenient for all parties. All documents will be reviewed, explained, executed and approved.
  • ALTI will disburse funds as required by the terms of the Purchase and Sale Contract and in accordance with the Lender's Instructions.
  • Title documents (e.g. Deed, Mortgage Deed, etc.) are sent to the appropriate town or city clerk for recording; loan documents are returned to the lender; copies are provided to the parties as necessary.
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Do I Need Title Insurance?
Approximately 99% of all purchasers of real estate in Vermont obtain either an Owner's Policy of Title Insurance or an Attorney's Title Opinion. Most lending institutions require a Loan Policy of Title Insurance to protect their interest. More and more purchasers are insisting upon an Owner's Title Insurance Policy instead of an Attorney's Title Opinion, not merely because it is usually less expensive, but because they know the company will be there for them in the future in the event of a claim. Title Insurance for a one-time premium, protects your title as long as you have an interest in the property. The coverage includes:
  • The cost of defending or settling a claim against your title
  • Loss to you resulting from:
    • False impersonation of the true owner of the property
    • Forged deeds, releases or wills
    • Undisclosed or missing heirs
    • Instruments executed under expired or invalid power of attorney
    • Mistakes in recording legal documents
    • Misinterpretations of wills
    • Deeds by persons of unsound mind, minors or persons supposed single, but actually married
    • Liens for unpaid taxes
    • Fraud
    • the list goes on & on.....

You may wish to check out the article by Dian Hymer describing the importance of title insurance in all real estate transactions.

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What is Act 250?
Act 250 (officially, Vermont's Land Use and Development Law) is a comprehensive Vermont law designed to control both large scale land development and land development in sensitive areas. Act 250 requires certain kinds of development and/or subdivision plans obtain a land use permit prior to construction. To obtain a permit, a developer or landowner must apply to their District Environmental Commission. For a copy of the Act 250 statute, application forms, rules, District Environmental Commission office locations, Board decisions, announcements, staff listings, etc., visit Vermont Environmental Board's web site: www.state.vt.us/envboard.
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Are There Different Types of Title Policies?
Yes, the most common are:
  1. Owners Enhanced Policies. This is the policy the buyer of a home or condominium will want. See our About Title Insurance page for details regarding coverage. It is only slightly higher in premium (usually 10%) than an "ordinary" Owner's Policy.
  2. Loan Policy. This protects the lender's interest only. A discount is provided when both Owner's and Loan Policies are issued simultaneously.
  3. Leasehold Policy. This protects a tenant's interest in property. It is most often used for commercial properties.
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What is a HUD Settlement Statement (HUD-1)?
This is a summary of the financial portion of the real estate transaction. The HUD will list the purchase price, loan amount, closing costs for both buyer and seller and show all pro-rations and sums to be disbursed by the title company to all parties. It is an invaluable document for all parties to keep for tax purposes.
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What is pro-ration of property taxes?
This is the process of charging either the buyer or seller for their share of real estate taxes owed on the property for their respective time of ownership. Taxes are said to be "pro-rated" back or forward to the due date of the property taxes.
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What is pre-paid interest?
This is interest due from the date of a loan closing to the first day of the following month. Most loans require payments to be due on the first day of the month. Each monthly payment reflects the principal and interest due on the loan for the previous month. A loan closing on the 20th day of the month will require an interest adjustment through the 1st day of the following month. The first payment will then be due on the 1st day of the following month. For example, if you close on June 20th, interest will be collected for the period of June 20th through June 30th. Your first mortgage payment will be due on August 1st.
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What if there's a defect in the title which doesn't show up in the land records?
This can happen. We call them "hidden risks" -- the undiscovered claims which may arise long after you have bought your home. Protection against loss of claims on real estate, which cannot be discovered by examination of the land records, is one additional benefit which title insurance provides.
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