INSURANCE 4 Ways to Save on Title Insurance
Buyers can save $$ off policies if they are willing to ask questions and get independent guidance.
- Ask for the “simultaneous issue rate.” Simultaneous Issue Rate – When referring to title insurance, the simultaneous issue rate is the reduced rate for a Loan Policy or Owner’s Policy of title insurance ssued on the same property or loan at the same time as another policy. The term usually refers to a Loan Policy issued at the same time as an Owner’s Policy when a property is purchased. Asking for “simultaneous issue rate” can net savings.
- Ancillary fees, copies, courier, signing, Fed Ex, etc.
- Bring in your Old Title Insurance Policy – if you go with the same company many times you will get a discount on your insurance with the new transaction.
- If you are an investor or commercial buyer ask for a commercial/investor discount.
The fees are generally about 1 percent of the sales price for your escrow and title fees.
Some Tips~ When potential home buyers find their dream homes, they’re often too busy dreaming about paint colors or new furniture to worry about title insurance.
A title policy is an important protection that helps defend buyers (and their lenders) from future property ownership claims, surprise liens or otherwise cloudy titles.
Title insurance includes a two-part process. First, there is a search of a property’s title history to determine if there are any errors or problems with the deed. Second, an insurance policy is underwritten to protect the buyer if a problem is later discovered.
Cheaper however, is not always better, become familiar with the types of policies available and what they cover. Ask for a punch list outlining the different coverages available. Sometimes there are endorsement riders that may be prudent to ask for in certain situations. With inspections to a property by the title company they may be able to offer certain endorsements beneficial or a better coverage. A good resource for rates in your state or rules is www.alta.org
Understand the basic outline of the Preliminary Title Report you receive during your escrow and what is being insured, the face value and if this value will increase with the value of the property over time being insured. Ask what your options are with respect to actual insurance coverage .
There are basically 3 parts to a Preliminary Title Insurance Policy~
Schedule A– What they are insuring, the property.
Schedule B- Requirements called for during the escrow to perform to be able to issue the policy to the buyer and or lender.
Schedule B- Exceptions – What is not insured, but rather what the property is subject to you are purchasing. ie. Deed Restrictions, Easements, HOA governing documents etc.
Buyers would be cautioned to get a second set of eyes, someone who has an independent thought and who is well-versed in real estate. The best person for that is often an attorney.
If you have questions about Schedule B- Exceptions that are not clear in defining where an easement or road exists a Surveyor would be helpful to help read the documents, legal descriptions and tell you where they exist and how it affects the property your purchasing.
Your title company can show you where an exception, (book and page) is located sometimes on a map which is helpful.
Often, reducing your expenses on certain items can be as simple as calling up the title insurance company and saying, ‘I really do not want to pay these fees, can you remove them? Be fair and understand that they are in business to make money just like you are but it does not hurt to ask!
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