It is only after the title passes that the buyer gets the ownership of the property. While title passes, the seller normally gives a deed which contains certain warranties or guarantees. This is because it is also called as warranty deed. The seller warrants in that as the title is good and no one will come and challenge the integrity of the title. For instance, if the deed was forged before it passed to him, all the subsequent transfers are void. Other problems may harmful, those are like incorrect legal description in the deed or wrongly spelled name. The chain of title’s irregularities will place a cloud on title’s integrity. The problems are lower on the title, the insurance policy might get at lower price.
- Shop around: In some states, the insurers can set their own rates, because those state governments did not regulate it. In such cases, the insurance premiums can vary widely across companies. Barring the home owners search around, it is difficult to know the companies offering rates. The American Land Title Association website is one of the best place to start searching, because it provides the search based on the geography. Another option is asking an independent attorney about insurance company recommendations, costs involved and local regulations.
- Title search: If you are ready to sell a property, a title company or an attorney will perform a title search. The title searchers do the chain of title process for back about fifty years. Through the deeds recorded in the public records the title searchers trace the ownership of the title. They also check if the liens have been released and check the mortgages records. A title insurance commitment will prepared by the attorney or by the title company based on the documents found in the public records. For this, the title company or the attorney will charge certain fee. If the title search is more expertise, the fee will be high. In some states it is regulated by the state governments.
- Negotiate fee: Fees negotiation is not possible where the insurance fee is regulated. If the regulations are not there in your state, you can negotiate. In either case, there are some add-on expenses like courier, copy fee, mail, etc. so you can negotiate for them.
- Ask seller to pay: You can ask the seller to pay the title insurance. If the negotiations with him is succeeded you can get some thousands of dollars.
- Re-issue rate: If there is any other insurance policy on the title from a company issued in the last few years, the title insurance company will offer a discount. It is called re-issue. Th reissue rate or the discount will probably around forty percent. So check and ask for if there is any insurance before.
If you want to buy a property with an intention of reselling it within a year, ask for hold an open policy from the title insurance company. Probably with an additional ten percent on the policy fee, the title insurance company will hold the title commitment open for one year or more. The company will issue the policy while you transfer the property to the buyer rather than the time of you buy from the seller. Generally, the seller pays the title insurance policy, you can pay additional ten percent when you buy and ninety percent saving on the title insurance while you sell.