What Every Realtor Should Know About Title Insurance |
| The process of buying a home is complicated. Consumers can become confused and frustrated with the mounds of paperwork and documents to sign. Fees show up at closing that can sometimes surprise the buyers.
Title insurance is one of those charges least understood by homebuyers, who often see it as just another fee they have to pay to buy a home. As an important adviser to your clients, you can help them understand the value that title insurance provides, and the dangers that can be incurred without it. Title insurance protects against problems affecting the title to a home, which is likely your client’s most valuable asset. Homebuyers are protected from ownership issues by purchasing an Owner’s Policy of title insurance, which ensures that the title to their property is clear of possible problems. These include liens or encumbrances, such as unpaid mortgages, property taxes or child support liens, just to name a few. Additionally, title professionals will look for anything that could limit the use of the property an example being utility easements. When a title professional finds an issue, they work to resolve it – typically without you even knowing about it. The Owner’s Policy covers the cost for professionals with local expertise to discover, identify and repair issues. The Owner’s Policy is a one time fee unlike other types of insurance with an annual premium. This also means that title insurance has lower loss rates than other forms of insurance. In title insurance, a claim is serious, and a loss means your client’s homeownership is threatened. Low loss rates are good for consumers. The curative work performed by title agents minimizes the fear, disruption and distress that title claims have on homeowners. An Owner’s Policy provides protection for as long as they or their heirs own the property. Having an Owner’s Policy means that the cost of defense and legal fees are paid by the title insurer for the homeowner. In Washington, title insurance rates are regulated by the Office of the Insurance Commissioner. In addition, title insurance and real estate closing practices are regulated by the Consumer Financial Protection Bureau (CFPB). Keep in mind that title insurance industry practices vary due to differences in state laws and local real estate customs. Who pays for the Owner’s Policy varies from state to state and sometimes even within a state.
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