Some of the most frequent questions I’ve come across in my 20 years of experience with Placer Title Company comes from our consumers, you, the buyer.
What is title insurance? What does it provide to me as the consumer?
As we work hand-in-hand with our Realtor customers as well, we want to make sure that your customers understand and have the protection of title insurance for this huge purchase.
Make sure all of your clients are protected.
You’re a real estate agent, so you know that buying a home can be overwhelming for many of your clients. Homebuyers can easily feel confused and frustrated by the mounds of paperwork they have to sign. Plus, all the fees associated with closing can sometimes be a surprise even to an experienced buyer.
Owner’s title insurance is one of those items often misunderstood by homebuyers at closing, yet its value is tremendous. As an important adviser to your clients, you are in the position to help them understand the value of owner’s title insurance and the dangers that can be incurred without it.
What is title insurance?
Owner’s title insurance is a policy that protects homebuyers’ property rights. For the same reasons that the bank requires a lender’s insurance policy, a homebuyer obtains owner’s title insurance to protect their legal claims to the property.
How it protects your clients
Say, for example, your client recently purchased a new home from a builder, but the builder failed to pay the roofer. Wanting to be paid, the roofer filed a lien against the property.
Without owner’s title insurance, your client would be responsible for paying this existing debt; meaning they’d be paying the roofer out of pocket instead of purchasing something nice for their new home, like new living room furniture.
This is just one example of how owner’s title insurance protects homebuyers’ from various significant risks. With owner’s title insurance, your client would be protected from certain legal or financial responsibilities.
The good news is that owner’s title insurance protects homebuyers financially, as long as they or their heirs own the home. For a low, one-time fee – an average of 0.5 percent of purchase price – homebuyers can rest assured, knowing they are protected from inheriting existing debts or claims to their property.
State regulations and CFPB
Each state regulates its own title insurance costs. In addition, the Consumer Financial Protection Bureau regulates closing and settlement practices, which can affect title insurance.
Keep in mind that title insurance industry practices vary due to differences in state laws and local real estate customs. The party that pays for the owner’s title insurance policy varies from state to state, and sometimes even within a state.