Your home is more than just a property. Your home is a shelter for your family. It is a nestegg for your future and the place where you’ll make countless memories.
Owner’s title insurance protects your financial stake in your most precious asset – your home. Only owner’s protection shields you from claims that could jeopardize your property ownership or costly matters that can cause heartburn when you go to sell.
As a non-benefiting third party, I highly recommend title insurance. This is a one-time charge that covers you the entire time you own the property.
Public records, which is what the title company searches, are only as accurate as the data that is in there: It isn’t perfect. My business partner and I bought title insurance, along with 99% of every other buyer we’ve helped.
In the off chance there is an unpaid contractor or estranged family member, etc., who may challenge you and claim ownership of your home, you want to be defended.
Imagine that happening three years after making payments, and now they claim they own 33% of your home and those payments you’ve made. For that reason, I always recommend title insurance – despite any findings the title company presents.– Eric Fafoglia, The Alliance DC
Owner’s protection is available through a Standard or an Enhanced title insurance policy.
The Standard policy is sufficient for the majority of cases and covers issues that should have been identified and resolved prior to closing. The Enhanced policy costs an additional 20% and extends Standard coverage to a number of post-closing issues.
An Enhanced owner’s title insurance policy is not always necessary, so talk to your title attorney or closing agent to help you decide the appropriate level of coverage for your real estate purchase.READ MORE: STANDARD V. ENHANCED – COMPARE POLICIES
On average, title agents discover an issue with title in about 33% of closings.
The issues are usually resolved by the title agent and their underwriters prior to closing, without any fanfare, assuming there is an active owner’s title insurance policy on the property. About 5% of title snags result in a title claim. Without an owner’s policy, matters and claims can become even more complicated.
Order title services with a reputable title company near you and let them handle the rest.
They’ll review documents such as loan statements, tax records, land surveys and the chain of previous owners. Once the title company confirms everything is in order, they will issue your owner’s title insurance policy. Owner’s protection is essentially the title company’s guarantee that title is free and clear, and that your right to title will be defended and your losses will be covered.
Most reputable title companies offer some type of Quick Quote tool on their website.
The best way to decipher your closing costs quotes is to compare the “costs at closing” listed at the bottom of Page 1 on your preliminary Closing Disclosure like the one you can create here.
Become familiar with some of the tricks title companies play that give the appearance their rate is lower. For example, some title companies will publish a very low settlement fee and then in the fine print tell you it doesn’t include costs for a bevy of title services that are typically involved in a real estate purchase – those fees are extra. Be sure to confirm what all is included in the settlment fee when you receive your quote, or ask if the fee is all-inclusive.
Once you’ve determined the true settlement fee for each title company, you’ll be able to do an apples-to-apples comparison and choose the title company that is right for you.
Most of us learn in school about the one-room log cabin in Kentucky where our 16th president was born.
But did you know his father lost the cabin, along with the surrounding 300 acres, when someone with a better claim to the land came along and forced the Lincoln family to move?
Four years later Abe’s father had to defend title a second time, and while he was successful, the experience was costly, and he ultimately uprooted his family again and relocated.
Episodes like these were not uncommon before title insurance laws were enacted. An owner’s title insurance policy would have compensated the Lincoln family for its losses.
Title agents discover an issue with title in roughly 1 in 3 closings. Most title issues are resolved pre-closing, but about 5% result in a title claim.
Oftentimes, buyers and sellers never have to hear about the behind-the-scenes curative work that goes on pre-closing. This is because most consumers opt in to purchasing owner’s protection.
We’ve seen it with our own eyes. Buyers waiving owner’s title insurance coverage, having a title claim and then making a claim against their real estate agent for not “properly advising them of the importance of obtaining coverage.”
Closing costs include taxes, lender fees and title fees that a homebuyer pays at settlement. Watch this video to prepare for the process.