I recently met with a potential seller who had a great question regarding title insurance policies. When they originally bought their home, they purchased a title insurance policy. If they sell their house, they’ll purchase another title policy. They wanted to know why they had to pay for a title policy when they bought their home and then again when they sold it? To answer this, we need to define the two types of title policies.
Owners Title Policy
In Santa Clara County it is customary for the seller to pay a one time premium for the new buyer’s title policy. The amount of the title policy is based on the sales price of the property. The owner’s policy indemnifies the buyer against loss and provides a defense in the event of claims against the buyer. Coverage last as long as the buyer remains on title.
The Owner’s Title Policy protects the new homeowner (buyer) from:
Lender’s Title Policy
In Santa Clara county it is customary for the buyer to the pay for title insurance premium for the Lender’s policy on the home loan. The amount of the policy is based on the amount of the loan, not the purchase price of the property and covers the lender’s interest in the property if any of the above (1-7) occur.
Click on Title Wizard’s “who pays the costs” to find out who pays for title costs (based on the county where the subject property is located).
Comparison Shopping for Title and Escrow Services
There used to be several title companies in Los Altos, but with the downturn in the real estate market several offices consolidated into other locations or closed business altogether. Consumers can ask their real estate professional for a reputable title and escrow company and/or go to Title Wizard to compare title and escrow fees and services.
Lastly, below are tips that the Title Wizard web site recommends when comparing title and escrow fees, policies, coverages etc.
Should you have any real estate questions, please feel free to contact me directly at 650 917-4250 for a private conversation.