Homeowners insurance, Home Warranty insurance but did you buy Title insurance? 

Prior to closing on your new purchase, you produced proof of home owner’s insurance- protecting you (and the lender) in case of a disaster.  And at the closing, you paid for Title Insurance – a policy that only 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.

Over the years some owners discover having the deed to the property doesn’t necessarily mean the property is free and clear.  To jog your memory 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.  It was in the news for weeks.

After 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.  And at the closing, the title agent rushes through an explanation but some buyers don’t understand the significance of purchasing the policy before they walk out of the room. 

The only way to protect your interest in the property is 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.  A simplified definition of the Owner’s  Title Insurance policy is protection against anything and everything impacting the title prior to your purchase. 

According to a Title Insurance Premium Estimator, the one time cost on a $300,000 home with a mortgage of $280,000 is $1667.50 (Price estimated for a policy issued at closing) 

Many homeowners (and their agents) just assume because no problems were found for their closing- then all future sales should be alright.  And it’s true that in the majority of closings very few 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 the title company will explain the details prior to closing-but only if you ask.

Title companies offer a discounted rate to buyers at closing which is good for 30 days.  A smart move is to plan on paying for it at closing.  Budget the cost into your closing costs and purchase at the same time you sign the papers on your new property.

Questions about Title Insurance call and I’ll set up an appointment with our title expert.