Important Questions About Title Insurance: Do I Need Title Insurance to Sell My Home?
Are you thinking of selling your home? While the buyer might already be pressured to pay for lender’s title insurance, the transaction could go faster if you actually offered to pay their owner’s title insurance for them. In many places, the seller is required by law to pay the title insurance instead of the buyer, and even if you live in an area where you don’t have to abide by that rule, covering the costs will ensure a smoother transaction and better relations between you and any potential buyer.
Why Would You Offer to Pay the Title Insurance as a Seller?
In most cases, when selling your home, experts will say that the typical course of action to take is for you to cover the owner’s title insurance and for the buyer to cover the lender’s insurance costs. While this isn’t what always happens, there are many advantages to you paying for at least part of the title insurance premium, whether you have to or not:
As a seller, it’s important to ensure that the title is “free and clear,” as the buyer will seek to do for the lender that provides them with their financing.
By covering the fee for the owner’s insurance policy, you also have the chance to settle any disputes once and for all, whether they are current or older.
Ensuring potential buyers that you will offer benefits such as covering the title insurance costs can also be a practical approach to selling your home for a better price.
Do You Still Need Insurance If You Sell to a Relative or Close Friend?
In the event that you’re selling your home to a relative or close friend, and if title issues are discovered, you might carry greater liability as a seller than as a buyer. In most cases, you might sell for a much lower price, and you might not even have a written sale agreement with the buyer. If that is the case, your liability will be even greater. Title insurance can help minimize that liability and protect the buyer from any title problems in the future as well.
Does Your State Require Title Insurance?
In Colorado, sellers pay the insurance premium. In Georgia, buyers pay both title insurance and closing costs, while in Pennsylvania, buyers pay most of the amounts required for title insurance, closings and even a part of the transfer taxes. What is the regulation in your state? Depending on what the law dictates, you may or may not be required to pay title insurance. There are places where it’s optional, or where you may be able to reach a settlement. Whether or not you have to pay as a seller will also depend on how you arrange things with the buyer.
Are Insurance Rates Regulated?
Some states actually have regulated insurance rates, meaning that everyone pays the same amount for title insurance. While there are factors that may influence the rates, they will not depend on the company you get your insurance from or any of their policies. For a seller, getting title insurance in such areas will be a much more convenient solution. You can take care of the problem knowing that you didn’t lose money and being fully aware from the start of the amounts constituted by the fees you have to pay for title insurance.