TITLE INSURANCE EXPLAINED | HOME SELLING TIPS
Most of the time people have no idea what an owners title policy is, what it covers, and who ends up paying for it. In this short article and video we will break that down for you!
WHAT IS A TITLE POLICY?
In real estate, title insurance insures against the financial loss caused by defects in the title and will fight against lawsuits that attack the title or in the case of a covered loss, will reimburse the insured up to the policy limit.
When you open title during a transaction, the title company will run a thorough search using county records and other resources to discover potential issues that may come up with the title itself.
WHAT DOES IT PROTECT YOU FROM?
When the title company does their research, they will find any deficiencies with the title. This will safeguard you against any future threats of property ownership, such as, but not limited to, previous owners heirs that may claim the property is theirs, hidden judgements or liens against the property, forged documents, easements and boundary disputes.
If any of these issues should come up, the title company will work to resolve the problems prior to closing. If something were to arise after closing, like the previous owners heirs claiming the property is theirs, the title policy should protect you.
WHO PAYS FOR IT?
The payment for an owners title policy is a one-time payment at closing and will last as long as you own the property.
But who pays for it? Good question.
Traditionally speaking, the sellers would pay the owners title policy, because it’s their house. Everything is negotiable, so it’s not uncommon to see a buyer willing to pay this fee to sweeten up their offer in an ultra-competitive market or in multiple offer situations.
So the answer really depends on the offer the buyer gives you. But for now, just expect that you, the seller, will have to pay for this expense.
The cost is a fixed rate through the Texas Department of Insurance and depends on the exact sales price, so if you want an accurate number ask your agent or head on over to the TDI website.
If you would like to quickly calculate what your title policy will cost depending on your sales price, click here to visit Frontier Title’s title calculator.
This is a birds eye view about title insurance and there are other deep discussions related to title policies that is beyond the scope of this video and article. So, if you are interested in learning more about title policies, check out First American Title. They are a nationwide title company and is the #1 title company that our team prefers to do business with.
If you want to know more about selling your house, be sure to check out our blogs and videos or you can schedule an appointment with a member of our team.