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Owner’s Title Insurance

Individuals involved in situations touched by owner’s title insurance are faced with different decisions within the process. Uncertainties of who is required to have owner’s title insurance or what protection owner’s title insurance offers often lead to questions like the ones answered below by the Experts.

Is it a legal requirement to have owner’s title insurance when I am purchasing a property?

A buyer of a property is not required by law to buy owner’s title insurance on the house at closing. However, the lender will require lender’s title insurance to insure the lender’s title interest in the property for the duration of the loan. This policy will cover the amount of the loan. The title company will then give the closing law firm an owner’s title insurance policy that covers the owner’s interest in the house. So, in the end, the owner will typically end up purchasing both the lender’s title insurance and the owner’s title insurance.

Does the owner’s title insurance policy cover both the buyer and the seller?

There are different kinds of Title Insurance policies available that can be tailored to suit different parties. The standard form of owner’s title insurance associated with home sales isn’t used to protect the rights of either the buyer or the seller. Instead, it is used to protect the rights of the lender. This means that, in the event the title is discovered to be invalid, the lender is still assured of the money that is owed on the mortgage. However, in certain cases, buyers invest in owner’s title insurance to ensure that their interest in the property is protected. In a few jurisdictions, the law even states that sellers need to pay for this insurance to ensure that the buyer is given full title to the property,

I am purchasing a town house in Minnesota. On the good faith estimate there is a fee for both lender’s title insurance and owner’s title insurance. Do I need both? There is also a closing fee and an assessment search fee. Are these appropriate fees?

In most cases, you would be required to take a lender’s title insurance policy. The closing and assessment search fees are typically part of the closing and are usually reasonable. Although owner’s title insurance is not a legal requirement, it is highly recommended since it will protect you against a missed lien or other title defect. It will also cover you for the duration of your ownership of the property.

In the state of Florida when a home is sold, who pays for the owner’s title insurance and the documentary stamps?

According to the Florida Bar-Approved Contract, the title insurance is typically paid for by the seller. However, this is negotiable and the buyer can choose to pay the owner’s title insurance instead. Basically this means that depending on how the contract is drawn up, either the seller or the purchaser will pay for the title insurance.

The Documentary Stamp Tax (Doc Stamps) is levied against both the seller and the buyer but here again the parties can come to an agreement about who will pay the money. Typically, the buyer takes on these costs.

Do I need Owner's Title insurance and how much should I expect to pay if I get it?

Owner’s title insurance typically costs a little more than a lender’s policy which is considered mandatory. While title insurance is not mandatory, it is highly advisable. This is because while a lender’s policy is taken to protect the purchase price on the house, title insurance is taken to protect the validity of title which is as important.

There are several advantages to taking owner’s title insurance. While the questions above may have clarified some of your own doubts on the issue, you may have other questions that are related to your specific case. In this situation, direct your queries to Experts who can give you information on legal requirements for owner’s title insurance and the benefits it offers. All at an affordable rate.
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