Obvious History
Everyone knows most common colonial historical facts about Philadelphia.
- 1766 – The first permanent theater in North America was started here
- 1769 The first life insurance society was started here
- 1773 – The American Medical Society was founded here
- 1776 -The Declaration of Independence was signed at Independence Hall
- 1777- The first flag for our new nation was sewn at Betsy Ross’s House.
- 1784- The Pennsylvania Packet or General Advertiser, the first daily newspaper was published here
But there are lots of real estate related first people don;t know about.
We Made the First Mortgage Loans
Did you know that the first mortgage in the U.S. was issued to Comly Rich to build a property at 4726 Orchard Street in Frankford (now a section of Northeast Philadelphia) which is pictured at left. The loan was issued by the first savings and loan in the United States, the Oxford Provident Building Society, founded 1831. Though the loan was never paid off (making this possibly the earliest foreclosure in the US), the property was entered in the Historical Register in 1960.
We Invented Title Insurance
In 1876 , during the Centennial , the first Title Insurance Company in the United States was founded in Philadelphia. In fact, through successor companies, that firm ,known as Commonwealth Land Title (now owned by LandAmerica) still issues title insurance today!
Title Insurance is used to assure buyers that the title of their home is free and clear of liens and encumbrances at the time of purchase. During a re-finance, title insurance will often be required by the lender to protect their interest, assuring that they are the primary lien on the property.
The need for title insurance arose historically from the fact that traditional methods of conveying real property did not provide adequate safety to the parties involved. Until the 19th century, transferring title to real estate was handled primarily by conveyancers, who were responsible for all aspects of the transaction. The conveyancerconducted a title search to determine the ownership rights of the seller and any other rights, interests, liens or encumbrances that might exist with respect to the property, and, based on its search, provide a signed abstract (or description) of the status of the title. Although the conveyancer was generally not a lawyer, that individual was recognized as an authority on real estate law. The conveyancer only provided limited protection to the purchaser of real property.
In 1868, a lawsuit was filed was filed in Pennsylvania that would change the levels of protection the buyer expected in a real estate transaction.. In that case, a conveyancer named Muirhead, had searched and abstracted a title for a buyer named Watson. Muirheadchose to ignore certain recorded judgments (after consulting with an attorney) reporting the title as good and unencumbered. On the basis of that title abstract, Watson bought the property, but was later compelled to pay the liens that Muirhead had concluded were not a problem.
Feeling somewhat ill-used, Watson sued Muirhead , but the Pennsylvania Supreme Court ruled that there was no negligence on the conveyancer’s part and dismissed the case. Watson, an innocent buyer had no protection.
The case of Watson v. Muirhead demonstrated that the conveyancing system could not provide safety to buyers ,so shortly after that court decision, the legislature passed an act “to provide for the incorporation and regulation of title insurance companies.”
Since then, the title insurance industry has grown to become an essential component in the majority of real estate transactions in this country. Title services vary somewhat from one area of the country to the other, but the essential purpose is to assure a buyer that their transaction can be completed with efficiency, security and safety.
And We Helped Start the NAR
That’s the National Association of REALTORS. In 1908 The Philadelphia Real Estate Association was one of the founding members of the National Association of Real Estate Exchanges, Which became the National Association of Real Estate Boards, and in 1970, The National Association of REALTORS.
Those groups were instrumental in creating the REALTORS Code of Ethics in 1913 which was used by many states as the basis for their state regulations of the real estate industry which were not put into effect until years later. In Pennsylvania in fact, our first licensing law wasn’t passed until 1929.
SO as rich as our better know history is, we should , on this Fourth of July, remember how many of the real estate institutions we take for granted started here in Philadelphia!