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Why Bother Paying for Owner’s Title Insurance?

filed under: For Buyers posted on March 13th, 2008

 You purchased a home and made sure to negotiate for a Home Warranty to protect yourself.  leaky faucet_rs

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In order to close on the property, you needed to produce proof of home owner’s insurance- protecting you (and the lender) in case of a disaster. 

 

At the closing, you paid for Title Insurance – a loan policy that protects the lender against title problems.

Chances are you didn’t purchase the most important insurance of all- “owner’s title insurance”ensuring you free and clear ownership of your home and land.  And as some owners have discovered- having the deed to a piece of land does not necessarily mean the property is free and clear. 

Several years ago area residents were horrified by the mess created by Erpenbeck scandal  in Kentucky and Ohio.  The builder’s failure to pay his bills caused home buyers to incur huge legal expenses and, in some cases, lose their homes.

Afterward the Erpenbeck mess the push to purchase  an “owner’s title policy” was magnified by the media and Realtors. 

But the memories have faded and buyers are no longer counseled early in the buying process to budget for title insurance nor are they given full explanation at closing on the importance of purchasing the policy before they walk out of the room. 

The only way to protect your interest in the property is with a policy called “owner’s title insurance”.  It is a one time fee covering you against most of the things that could come back to bite you when you sell your home 2 years or 40 years from now. 

According to the Title Insurance Premium Estimator the one time cost on a $200,000 home with a mortgage of $190,00 is $1087.50 (Price estimated for policy issued at closing)  Many home owners (and their agents) assume since no problems were found for their closing- then all future sales should be alright.  And in the majority of closings few, if any, major title issues surface.  However, if you are the one with problems, attorney’s fees will quickly exceed the price you paid for an owner’s title policy at closing. 

The State of Ohio has a great web site with detailed information about title insurance and another site with pricing information.   Your agent should be able to get an estimated cost for you- or try this Title Insurance Premium Estimator.

The title company offers a discounted rate to buyers at closing which is good for 30 days.  Don’t wait -budget the cost into your closing costs and purchase at the same time you sign the papers on your new property.

There are a few other “preventative” measures buyers should know about. Whether you live in Fairfield, West Chester, Mason Cincinnati Ohio- if you would like more information or need any type of real estate assistance call 513-300-4090 or send an email.

If you would like to read more see Real Estate Home Buying.

  1. Why Bother Paying for Owner’s Title Insurance?

    [...] improvement loans | improvement-loan.com wrote an interesting post today onHere’s a quick excerpt  You purchased a home and made sure to negotiate for a Home Warranty to protect yourself.   In order to close on the property, you needed to produce proof of home owner’s insurance- protecting you (and the lender) in case of a disaster.  At the closing, you paid for Title Insurance – a loan policy that protects the lender against title problems. Chances are you didn’t purchase the most important insurance of all- “owner’s title insurance”ensuring you free and clear ownership of your [...]

  2. Cyndee Haydon

    Kathy – it’s one of those things no one thinks they need till something goes on and then boy are they costly mistakes.

  3. Kathy

    I agree. We refinanced 3 times and low and behold the 4th time was the charm. A lien on the builder was discovered 13 years later. Luckily we were able to take care of the error without an attorney.

  4. Kim Schieldknecht

    Kathy, good points. i am sure you negotiate a an owner title policy for all of your customers. One of the best things you can do for a buyer!

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  6. Lindsay

    lots of information, im new at this, so any tips help

  7. What are the Hurdles for Home Buyers?

    [...] Purchase Home Owners or Hazard Insurance-lenders require borrowers purchase a one year policy of home owner’s insurance covering damage to structure.  This has to be purchased prior to closing.  Many buyers wait until the morning of the closing or confuse the insurance policy with a “Home Warranty” or “Title Insurance”. [...]

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