Experts reveal that there is usually one case out of every 3 searches of a title or public record defect that needs to be fixed before completing the transaction.
What follows next is the title company contracting an underwriting company which will issue the insurance policy to pay for the defense in case of a challenge for the title. You will also receive compensation if you lose. Well, that is the sole purpose and the general idea of title insurance.
As a property buyer, you will typically need two title insurance policies including the owner’s and the lender’s policy. The following article is a list of questions that you must ask your title insurance service provider before signing the dotted line. For more information regarding title insurance log on to Sunnysidetitle.com.
- Do you regulate the title insurance prices?
There might not be much difference among companies offering their services, but there are two factors to consider here. Based on the quality of the insurance and the quality of the search some services might not come cheap. You need to find a title company that will complete a thorough search and has an underwriter for at least 10-15 years in case there is a problem.
However, you need to keep in mind that even with the regulated prices there might be ancillary expenses to bear including wire transfer and courier fees. So ideally you should be enquiring about the total transaction price and not the insurance cost.
- What is the extent of coverage that you need?
The owner’s policy will protect you in case of a number of contingencies including forgery, fraud, undisclosed heirs and spouse claims. If you need additional coverage, you need to pay more. For example, you can go for a restriction endorsement, but you will be boosting your cost as well. Additional insurance like the ARM (adjustable rate mortgage) will also add up to the net price.
- Who pays for the title insurance?
The party responsible for the payment of the policies, both the buyer’s and the lender’s policies vary with the state of residence. In case both the policies are being purchased from the same firm they offer discount pricing. The general rule is that the buyer pays for one of the policy while the seller pays for the other. You need to remember that haggling is allowed over part or all of the cost.
- Is my seller pushing a specific title firm?
Since you are paying for your insurance, you have the right to choose with respect to the company. In case you aren’t paying, and yet you want to have a say in the choice of the company, you have to bear a certain percentage of the costs. Always be wary of a seller trying to push a specific title firm. The general rule of thumb is to bring in a fresh pair of eyes to make sure of the authenticity of the title search before the purchase.
- Whom should I trust?
Our experts advise you to look to the lender and not the real estate agent or the mortgage lender for the best deal as there will be common interests that will dovetail into a fruitful relationship. The lender guarantees a large amount of money based on the assurance that your collateral, i.e. the property is actually yours.
Research the underwriter and the title company or the attorney online to review the customer ratings before making any choice.