What is Title Insurance?

Are you curious about what Title Insurance is and more importantly…who pays what and how much?

Title InsuranceHere is a simple breakdown of which policy is paid by the Seller and which is paid by the Buyer…and how it protects both parties in a real estate transaction!

What the Home Seller Title Insurance Policy looks like.

Title insurance for property owners, called an Owner’s Policy, is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and is valid for as long as the owner or his/her heirs have an interest in the property.

Only an Owner’s Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search. Possible hidden title problems can include:

  • Errors or omissions in deeds
  • Mistakes in examining records
  • Forgery
  • Undisclosed heirs

What the Home Buyers Title Insurance Policy looks like.

Title insurance for the home buyer is really not for the home buyer at all. Rather, the policy is intended for the mortgage lender. And aptly enough, it’s called a Loan Policy. Most lenders require a Loan Policy when they issue a mortgage loan. The Loan Policy is usually based on the dollar amount of the loan and it protects the lender’s interests in the property should a problem with the title arise.

It’s also important to note that the Loan Policy does not, in fact, protect the buyer but again, insures that the property is protected against any title defects and although paid by the buyer at closing, does decrease each year and eventually disappears as the loan is paid off.

I hope you found this brief explanation of Title Insurance helpful. If you have an questions about this or any other part of a real estate transaction, don’t hesitate to contact me!

SimonsI am passionate about Real Estate and eager to answer all of your real estate questions! Text or Call me at 360-880-2356 or email me directly to ask about Buying, Selling or Investing in today's Real Estate Market - serving Lewis County & Thurston County, WA.

Janet Simons | Certified Residential Specialist | Real Estate Broker
Mountain Valley Real Estate