When purchasing a home, obtaining clear title (or ownership) is your ultimate goal. Clear title ensures there are no delinquent taxes, unpaid liens, undisclosed heirs, unknown property line conflicts, or surprise easements on your new property.
To ensure you’re getting clear title from the seller, you attorney will conduct a title examination by searching public records back a number of years (sometimes decades). Almost one-third of all title examinations find an unusual title problem according to the American Land Title Association. Some issues can be resolved easily, but some require the seller to contact past owners (or their attorneys) before they can be addressed.
If you’re getting a loan for your home, the lender will require you to get a “lender’s title insurance” policy. This type of title insurance policy, however, only protects the lender and not the owner, and the policy coverage decreases over time as the loan is paid off.
In contrast, an “owner’s title insurance” policy is the best way to protect your interest as the new owner of your home. This type of title insurance policy, which is paid for with a one-time fee at the purchase, covers you and your heirs for as long as you own the property. It will also pay potential legal fees for defending and settling claims related to your ownership.
Rates for title insurance policies are based on the purchase price for the property but are regulated in all states, so prices are usually similar among reputable insurers. A typical lender’s title insurance policy will cost $2.75 per $1,000 (or $618.75 for a $225,000 loan), and an owner’s title insurance policy will add another $2.225 per $1,000 (or $556.25 for a $250,000 purchase price) if purchased at the same time.
As a full service law firm with a focus on real estate transactions, Gove Law Office is a title insurance agent for a number of reliable title insurance companies. Call or email us today to discuss your options.
Michael S. Gove, Esq. is the founding partner of Gove Law Office, LLC, a general practice law firm with offices in Northampton and Ludlow, MA. The firm handles a wide variety of legal needs, including all residential and commercial real estate transactions and leasing. For more information, please contact the office by calling 413-583-5196 or emailing mgove@govelawoffice.com.