What is Gap endorsement

by bradkoenig on February 17, 2010

Wisconsin has changed their residential offers to include gap endorsement.
In the past most experienced agents would automatically include gap coverage on an offer.

What is GAP?

Gap Endorsement: Gives coverage against intervening adverse matters affecting title which are recorded or filed between the date of commitment and the recording of the documents.

Take a look at the timeframe below.
Gap endorsement time frame

Gap coverage will cover you as a buyer from the time Title insurance is issued to the time your new deed is recorded. Based on the time frame above. Seller and the title company give to the buyer free and clear title Jan 1st, they update it again Feb 1st. Buyer closes on the home March 1st only to find out there was a judgement recorded against the property 2 weeks prior to closing. This happens in larger counties where it may take time to record to judgement. Milwaukee county can take 30-60 days.
This is a great way to protect yourself as a buyer. Average cost is $75-150 and most of the time covered by the seller per the contract. Keep in mind the title company has to approve the gap coverage. They may turn it down based on the number of liens are recorded against the seller. If the title company turns down Gap coverage, I would be concerned about moving forward on that property without further research. Talk to the title company and ask them for other options.

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{ 1 comment… read it below or add one }

Lisa Petersen May 27, 2010 at 6:39 pm

Hi Brad,
I’m flattered that you chose to use my Gap Timeline as part of your blog. You did a nice job summarizing gap coverage and the risks that the title company undertakes when it agrees to insure against defects in the gap. I was pleased that you took the time to mention that Gap Insurance isn’t always available and Iwould suggest that Realtors s work with their local title agent to find out whether or not Gap Insurance is available before they accept the Offer. Nice job.

Lisa

Lisa A. Petersen

Underwriting Counsel

Fidelity National Title Group-Midwest Agency

Chicago Title, Security Union, Fidelity, Ticor Title,

Lawyers Title and Commonwealth Land Title

Direct (920) 386-8018 I Mobile (920) 382-5397

Fax (630) 690.2443 l Office 800 250.9271 x4139

Email lisa.petersen@fnf.com

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