What is Title Insurance in a Real Estate Transaction?

If you are buying or selling real estate you have most likely heard of title insurance. Many people simply know title insurance to be that charge that appears on the closing statement. The title insurance charges are significant, and that is for good reason. There is a lot at stake in a real estate transaction so it is important for the deal to be insured in case an issue arises with the property.

The Title Insurance Policy

The three main fees associated with title insurance derive from the Owner’s Policy, the Lender’s Policy, and the Escrow or Closing Fee. There may be other fees depending on the level of coverage, such as specific endorsements to the title policy, wire fees, and transfer tax fees.

• Owner’s Policy. The Owner’s Policy is the insurance policy for the purchaser of the real estate. Your real estate lawyer will want to review the policy to ensure that the only exceptions to coverage are agreeable. If, after purchasing the property, you discover a defect in title, you would ask the title insurance company to reimburse you under the Owner’s Policy.
• Lender’s Policy.  The Lender’s Policy is the policy for the buyer’s mortgage lender. Since the mortgage lender is providing the cash to purchase the property, it will also want to be protected in case of a problem with the property title.
• Escrow Fee. In Illinois the real estate closing is usually conducted by a title company when insurance is involved. The title company assesses a fee for conducting that closing.

Should I Get Title Insurance?

If you are purchasing a property in Illinois, the contract that is often used between the parties to a real estate transaction will contemplate title insurance. While both parties can agree to waive title insurance, this is not advisable in most scenarios. A real estate transaction is often the most expensive contract a person will enter in to, so it makes sense to insure the transaction. The last thing you want to have happen is to purchase a property only to get hit with a lawsuit by someone else claiming to own the property or a portion thereof.

Of course all situations are unique, so it is important to consult with your real estate attorney before deciding whether to acquire title insurance or not.

Are All Title Companies the Same?

The short answer is no. Title companies can have different rates. Your real estate attorney will have access to title insurance rates and can compare the rates to determine the best value. Furthermore, you will want to analyze the soundness of the title insurance company. After all, you may own the home for many years, and you want to make sure the title insurance company will still be around to insure your property.

Contact the Gurnee Real Estate Lawyers at Johnston Tomei Lenczycki & Goldberg LLC Today

If you are buying or selling real estate in Gurnee or Lake County, it is important to be represented in the transaction by a real estate attorney who understands title insurance. The Gurnee real estate attorneys at Johnston Tomei Lenczycki & Goldberg LLC will work with you so that you understand the title insurance policy and the charges associated with it. We will guide you through the real estate transaction so that it is as easy as possible. We will always represent your best interests and will vigorously advocate for your position in the transaction. Contact the Gurnee real estate lawyers at Johnston Tomei Lenczycki & Goldberg LLC today to discuss your home purchase or sale.