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Commonly Asked Questions About the North Oakland County and Lapeer County Home Purchase- Why are the Buyer and I Both Paying for Title Work/Insurance?

who pays for title insuranceWhen you get your closing statement you will probably notice charges to both you and the buyer for title. A very over simplified way I’ve explained this in the past is that the seller is paying to supply clean title to the house and the buyer is paying to supply clean title for the mortgage company. For example- if the buyers has an IRS lien it can attach to the house and would have first position in front of the bank.

This morning I went to the web site for the title company I prefer my clients use- First American Titlewww.FirstAm.com. They have a much more detailed explanation than the one I’m going to offer here.

There are two types of title insurance when there is a purchase with a mortgage. The company the buyers is borrowing the money from for his mortgage (whether that is a bank, credit union, etc) will require what is called a Loan Policy which protects their interest. The cost is based on the loan amount and is less than the Owner’s Policy which is the part the seller typically pays for.

The Owner’s Policy is usually for the amount of the sale price and protects the buyer, if a covered title problem comes up later. Some of the hidden title problems that would be covered can include errors or omissions in deeds, mistakes in examining records, forgery, undisclosed heirs- basically insuring the buyer’s ability to be able to pass on clean title when he goes to resell later.

So basically the seller is insuring that he has clean title to the house he’s selling and the lender’s policy protects the bank the buyer gets his mortgage through.

For Sellers

Free Market Analysis

What to Expect on the Listing Appointment

Closing is Set- What’s Next?

Jackie Hawley
Keller Williams Realty

cell: (248)736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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