Who Pays for Title Insurance and What Do You Need to Understand About the Process?
The issue of title insurance can be quite complicated. It’s not always clear who “has to” pay for it and why, and in many cases that matter can be negotiated. Whether it’s in the buyer’s best interest to cover all the costs in order to land an excellent deal on the property they’ve purchased, or the seller actually offers to pay for it just to get rid of the property more easily, there are many aspects to consider regarding this matter.
Who Normally Pays for Title Insurance?
In most markets, it is the seller who pays for title insurance, but not in all cases. If the buyer gets a clear title with the help of the measures paid for by the title insurance, the seller will be able to finally part with their property and gain access to their funds. Sellers also have the most to gain in the event that they are able to sell the property at a price that goes over the average value of a home in their area. Nevertheless, there are instances when getting title insurance can be more difficult, and it’s also important to take note of how title insurance works in your area before making any concrete decisions regarding who has to pay.
Should You Offer to Pay for Title Insurance?
In some cases, it could be a good initiative to search for insurance options yourself, even if the seller doesn’t offer to pay. Owner’s title insurance can help you protect yourself and your investment in the event of title problems, and searching for all the viable coverage options, the regulations that affect insurance providers and the specific details regarding owner’s insurance costs will help you gain a favorable deal for your premium. That being said, it’s definitely better to allow the seller to offer to buy your title insurance, however, you might be interested in actually being involved in the shopping phase. Not all insurance policies are the same, and in some cases, you have to be extremely careful about which insurance companies you actually trust.
The Long Term Value of Lender’s and Owner’s Title Insurance
Legal owners, liens, registered mortgages, easements and many other records can be found with the help of the title search that your insurance policy will fund. Also, it is virtually inestimable how any misrepresentations or past errors could affect your title and your property value in the long run. Also, when you think of the fact that, combined, lender’s and owner’s insurance will rarely cost more than $1,000 as a one-time premium, it becomes clear that the long term insurance protection and the fact that the policy will index your amount to inflation, will be well worth the expense.
Are There Any Alternatives to Buying Title Insurance?
The only viable alternative to buying title insurance is to pay for a land survey. While this course of action could lead you to gain similar advantages with the help of an attorney’s opinion of title – which is typically hard to obtain – the costs involved are much higher, and the effort associated with getting everything ready for your land survey is simply not worth the gain. This holds especially true when you have the option to get title insurance at a much more favorable cost.