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Old 08-17-2008, 09:14 PM
 
835 posts, read 4,119,659 times
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Hi,

Is the owner's title policy different than home owners insurance? Here's a text I found, which states that the seller should pay for the owner's policy.
I would like to get your opinion.


When a closing takes place for a property that has a new mortgage, there are two types of title insurance that are issued. The first is an owner’s policy. This protects the new buyer and is paid for by the seller, and is for the full value of the property. This enables the seller to provide to the buyer a warranty deed. A warranty deed says the seller warrants to the buyer that he is getting title to property that is clear of all other claims. The only way a seller can give real meaning to this warranty is to provide insurance to the buyer from a title company. That is why the seller pays for the insurance.
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Old 08-17-2008, 09:55 PM
 
Location: Houston, TX (Bellaire)
4,877 posts, read 12,211,750 times
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It insures against defects in the title, i.e. if Bob sells you a house then 2 weeks later Jack claims that he is the real owner and not Bob and files suit against you.
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Old 08-17-2008, 10:13 PM
 
835 posts, read 4,119,659 times
Reputation: 701
Now, the owner's title policy should be paid by seller right?
And is this different than homeowners insurance?
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Old 08-17-2008, 10:24 PM
 
79 posts, read 319,474 times
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Owners title policy is usually paid by the seller, considered a part of his obligation to provide good title. But it is negotiable. Home owners insurance does not have anything to do with title to the property. Title insurance will defend you against an adverse claim of ownership and/or pay you the amount of the policy (the sales price of the property) should title not be good.
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Old 08-17-2008, 10:33 PM
 
835 posts, read 4,119,659 times
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Thank you sooo much wills! You helped me tremendously...
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Old 08-17-2008, 10:36 PM
 
Location: Athens, GA
76 posts, read 381,745 times
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It is customary for the Seller of the property to purchase The Owner's Title Insurance Policy for the Buyer. However, should the Buyer go through a lender for financing, (and many do), the lender will require their own Title Policy or Mortgagee Title Insurance Policy. In most cases, the Buyer bears the cost of purchasing the lender's title policy, unless the sales contract dictates that the seller will pay all costs associated with financing and closing of the transaction.

Title Insurance insures the new property owner and the owner's lender against any defects in the chain of title such as, missed liens, unpaid mortgages, or heirs of previous owner's suddenly surfacing. One thing to remember, which is a common mis-conception among property owners, if ever a Title Insurance Company is faced with a claim against a Title Insurance Policy they have issued, they will make every effort to repair the title by tracking down and obtaining necessary documents to correct the problem. In a situation where all attempts to repair the title are futile and the Title Insurance Company has to pay out proceeds against a Policy they have issued, the lender will be paid off and the property owner will receive the difference between the amount to pay off the loan and the actual face value of the Owner's Policy. But, the owner must then relinquish the property to the Title Insurance Company and vacate the property.

Homeowner's Insurance insures the new property owner's house and his/her contents against perils such as fire, theft, vandalism and sometimes accidients which occur on the property. If the property floods or is destroyed by gale force winds, this is NOT covered under this type of policy. There are separate policies for those types of perils, (ie Flood Insurance and Windstorm Insurance).

I hope this helps you.
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Old 08-18-2008, 06:57 AM
 
Location: A little suburb of Houston
3,702 posts, read 16,759,294 times
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Also be careful with the title policy. Make sure you have a survey conducted and get survey coverage. If at some point in the future there is a boundary dispute and you do not have this coverage in your title policy it could be very costly to you as it will not be covered. Something as simple as a slightly misplaced fence could turn into a big issue. i.e. I have part of one fence approx. 1 ft over property line (apparently a tree in the way when property was fenced), this could have been a big issue when my new neighbor moved in but we both acknowledged it and agreed to permissive use and joint liability on the tree in the middle.

Last edited by Poltracker; 08-18-2008 at 07:11 AM..
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Old 08-18-2008, 08:23 AM
 
1,290 posts, read 5,042,069 times
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I can tell you that Title insurance is negotiable. When we sold our home last year, we sold it to a relo coming in from out of town. The buyer's company was paying for relocation costs and title insurance was covered. They were not even aware until our realtor knew to ask since they were relocating. We split the cost with them and we both saved money.
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Old 08-18-2008, 03:38 PM
 
Location: Athens, GA
76 posts, read 381,745 times
Reputation: 56
Quote:
Originally Posted by Poltracker View Post
Also be careful with the title policy. Make sure you have a survey conducted and get survey coverage. If at some point in the future there is a boundary dispute and you do not have this coverage in your title policy it could be very costly to you as it will not be covered. Something as simple as a slightly misplaced fence could turn into a big issue. i.e. I have part of one fence approx. 1 ft over property line (apparently a tree in the way when property was fenced), this could have been a big issue when my new neighbor moved in but we both acknowledged it and agreed to permissive use and joint liability on the tree in the middle.
If lender financing is being used to acquire the property, the lender will require the survey anyway.
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Old 08-18-2008, 04:31 PM
 
Location: A little suburb of Houston
3,702 posts, read 16,759,294 times
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Quote:
Originally Posted by GeorgiaGirl2 View Post
If lender financing is being used to acquire the property, the lender will require the survey anyway.
Not always.
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