Title Company for Real Estate Buyers

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Even though the chances of you actually needing the title insurance is low, the costs far outweigh the risks. For example, if you purchase a property from someone who can't rightfully transfer full ownership to you, you could risk losing the entire property.

As a buyer, you will be required to provide title insurance to your mortgage lender. The lender’s policy will insure the lender against loss of priority as well as other insured risks up to the amount of the loan.

Unlike the lender’s policy, there is no legal requirement for a buyer to purchase title insurance. However, when the owner’s and lender’s policies are issued simultaneously, the cost of the lender’s policy is greatly reduced, making it highly cost-effective for the buyer to obtain this valuable insurance protection for herself. 

Although you may not be aware, the seller can not require that you purchase title insurance from a specific company unless they are paying for the full policy. This is addressed in federal law under Section 9 of the Real Estate Settlement Procedures Act (“RESPA”).

In some purchase contracts, the seller purchases the owner’s insurance but the buyer pays for the lender’s policy. In this situation, the seller cannot require the buyer to purchase that lender’s policy from a particular title company because the buyer is paying for the lender’s policy.