East Bethesda, MD Real Estate Blog

Your offer has been accepted... So, now what? Part IV (Title Insurance)

Title insurance is a good thing.  It protects you from claims from others on your new house (and these things do happen).  But it's bloody expensive. 

One way around the expense is to get a "re-issue" rate on title insurance.  If the current owner has been in the house for less than 10 years and they are able to put their hands on the physical title insurance policy, you just might be entitled to a discount. You can save a chunk of change if you are able to explore this route.  Doesn't happen all that often, but it's out there.  It requires the full cooperation of the sellers (another reason to play nice). 

There are two parts to title insurance.  There's the bank side- absolutely required (assuming you are taking out a loan on your new property).  And there is the purchaser's side- this is optional.  I don't recommend that you wave this option, but I've had clients do so.  Why get it?  Screwy things can happen in real estate.  Long lost divorcees can come out of the woodwork and lay claim to your property.  Illegitimate children can wreak havoc with estates.  A crazy seller might later dispute the sale.  An unrecorded lien on the property pops up.  You name it, it has happened.  And a few folks have seen "their" homes disappear.  For a couple thousand bucks, you purchase peace of mind.  Depends what type of player you are. 

There are two options available on the purchaser's side of title insurance.  Basic title insurance (we'll call this option A) is available at X price.  What I like to call "souped up" title insurance (option B) is available at a higher price (XX).  It has a few more bells and whistles.  There are a lot of great reasons for choosing B over A, but best to let the settlement attorneys go into detail.  And it's really important that you have a discussion with them about this prior to settlement.  You don't want to make a snap decision about this at the settlement table.  I'd much rather have you digest the information beforehand. 

Part I of "Your offer has been accepted... So, now what?"  tackles home inspections and how they might play out in your home purchase scenario.

 Part II discusses Financing and what to expect.

 Part III deals with settlement attorneys.

Coming soon... Be on the lookout for "Your offer has been accepted... So, now what? Part V" which will discuss home warranties.