Real Estate News

Title insurance: What does it cost?

Published: 17 Aug 2017

Title insurance is one of those things many would-be homeowners will hear about at some point in the homebuying process but not necessarily know what it means or, perhaps more importantly, how much it will cost. However, like many types of insurance, it's often a type of coverage that homeowners - and even lenders - can benefit from significantly in case improbable, unfortunate situations arise as it relates to the titles on their properties.

But for consumers worried about the cost of title insurance, there aren't too many hard and fast answers about what they can expect to pay, according to Smart Asset. That's because in some states, homeowners are required to pay for both their own title insurance coverage and that of their lenders, while other states have different requirements. In some cases, the seller is required to pick up the tab on this coverage. However, in most states, this can be a point of negotiation between buyers and sellers, as there are no specific legal requirements in place about whose responsibility buying the coverage is.

As for the specific cost, that too varies by state, the report said. However, it's important to note this coverage is going to be a one-time cost, and different factors can affect the price tag significantly.

Title insurance provides vital protections during and after the home sales process.Title insurance provides vital protections during and after the home sales process.

Many variables
Typically, the biggest driver of title insurance costs is the amount of work that's expected to be necessary to ensure all information about the accuracy of data related to the home sale, according to Money Crashers. In addition, the value of the property itself can be a factor as well, but often it's not as substantial as some homeowners may expect.

In addition, there may be some other costs added to the price of title insurance due to regulatory issues in certain states, but those vary and are often based on exactly what the law requires title insurers to do when coverage is purchased, the report said. So, as for the actual amount consumers can expect to pay for coverage, generally speaking the price tag will probably be somewhere in the range of $1,000, but experts note that in some easier cases the coverage can cost as little as a few hundred dollars, while more complicated ones might be as much as $2,000.

What can shoppers do?
When people look for title insurance, they should treat it as they would any other product they're not familiar with: Do a little research, then shop around for the best deal available to them, according to Bankrate. In these cases, it might also be wise to ask an attorney or real estate professional about what they can expect. Furthermore, in some states it may be possible to negotiate a little bit to get a better deal based on certain fees insurers might try to charge.

The more consumers can do to understand how title insurance benefits them and what it's going to cost, the more likely they will be to see the significant value and peace of mind it can provide on an ongoing basis, throughout the sales process.