Nearly every sale of a residential property involves the purchase of two policies of title insurance - an Owner’s Policy and a Lender’s Policy.
FOR THE SELLER
The purchase of a home is one of the most expensive and important purchases most of us ever make. A buyer will want to make sure the property is indeed yours to sell and that there are no unknown liens, claims, or encumbrances held against the property. A buyer will choose your property for its features and amenities. If the purchase agreement provides for the seller to select the title company or attorney, providing the buyer with an Owner’s Policy of title insurance from First American Title can be just as important as the work you put into maintaining and improving your property.
FOR THE BUYER
For most of us, buying a home requires help with financing the purchase price. Your home loan is secured by the new home you are buying. Your lender will want to make sure the security for their loan is protected by title insurance and you are the owner of the record. The lender’s title insurance policy ensures your lender that their lien has priority over other lien policies not shown in the policy. Many lenders condition their loans upon the purchase of a Lender’s Policy.
ACCORDING TO REAL ESTATE CUSTOM & PRACTICE
There is a one-time title insurance premium for the new buyer’s Owner’s Policy based on the sales price of the property. First American Title searches the public records to identify and eliminate title risks. The new buyer’s Owner’s policy indemnifies the buyer against loss for title threats undiscovered at the time of closing and provides a defense in the event of claims against the title according to the terms of the policy.
In most purchases, the buyer will be responsible for paying the title insurance premium for the Lender’s Policy on their home loan. This premium is calculated on the loan amount, not the sales price of the property. In the simplest terms, an Owner’s Policy from First American Title says to the buyer “You own it” and puts the financial strength of one of the nation’s leading title insurance companies behind it.
If you have any questions regarding the two types of Title policies, contact Think Real Estate Benefits for further information.
619.251.1088
Source: ©2024 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
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