What Is Title Insurance? Coverage In the Event of Hidden Claims
Your buyer is asking you to pay for their title insurance, but this policy protects them, not you — so what gives?
In some states, it’s customary for sellers to pay for their buyer’s title insurance at closing. And even if it’s not in yours, your buyer may negotiate for you to cover the cost as a concession to sweeten the deal.
We’ll walk you through everything you need to know about title insurance with help from top New Jersey real estate agent Adam D’Annunzio, who sells homes 54% quicker than the average agent in his Ocean City market.
Title insurance protects the buyer and their lender from title issues
When you sell your house, you must complete a title search to identify all legal claims to the property’s title. As the seller, you must resolve all liens found in the title search in order to transfer the title to the buyer. The title search may reveal 30 to 50 years’ worth of the property’s history and should uncover any mortgage liens, rightful heirs, filing errors, current deed holders, deed restrictions, or forgeries, to name a few.
The keyword here is “should” because title searches are not 100% foolproof. Even the most skilled title professionals may not uncover title issues due to filing errors, forgeries, or undisclosed heirs. That’s where title insurance comes in. The title insurance policy protects the buyer and their lender from any title issues discovered after the title transfer.
