What are the common pitfalls and mistakes to avoid when choosing a title insurance provider?

Buying a home is an exciting and rewarding experience, but it also comes with many challenges and risks. One of the most important aspects of the home buying process is choosing a title insurance provider, which protects you from any defects or claims on the property's ownership. However, not all title insurance providers are created equal, and there are some common pitfalls and mistakes to avoid when selecting one. In this article, we will discuss what title insurance is, why you need it, and how to avoid the most common problems when choosing a title insurance provider.

1 What is title insurance and why do you need it?

Title insurance is a type of insurance that covers you from any losses or damages caused by defects or liens on the property's title. A title is a legal document that proves your ownership of the property and shows its history and status. A defect or lien is anything that affects the title's validity or your right to use and sell the property, such as unpaid taxes, fraud, forgery, errors, or encumbrances. Title insurance protects you from any claims or lawsuits that may arise from these issues and pays for the legal fees and costs to resolve them.

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Dona Cardenas,Realtor

Realtor Broker Associate at Atlanta Communities Real Estate Brokerage Realtor, Broker Associate at The No BS Group Charles Rutenberg
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Title insurance in Georgia is paid at the closing table and used to be a negotiable item based on which company you chose. But I'm told that the rates are now the same regardless of which company the buyer chooses. What does it tell you that the mortgage company requires it for the loan amount? Getting title insurance coverage for your down payment or cash purchase is a must. I've had clients in the past that have had to use their title insurance and in both cases, the issue arose long after they had sold the property. Without title insurance, something that could have only cost less than $2000 could end up costing hundreds of thousands of dollars. It's a no-brainer in my book!

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2 How to find a reputable title insurance provider?

One of the most common mistakes that home buyers make is choosing a title insurance provider based on price alone. While it is important to compare costs and fees, you should also consider the quality and reputation of the provider. A reputable title insurance provider should have a solid track record of handling claims, resolving disputes, and providing customer service. You should also check the provider's financial strength and stability, as well as their licensing and accreditation. You can find this information online or by asking your real estate agent, lender, or attorney for referrals and recommendations.

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Nicolette Kimmel

Designated Broker
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Title companies are required to publish their rates and that is why they tend to be about the same cost no matter which company you go to. Defaulting to whatever title company your Agent recommends because of their personal relationships isn't always the best idea. You really want to get insurance with a strong company that can back the level of insurance that you are purchasing. For example: If I was purchasing a rural property that has been subject to multiple splits and easements I would pick a strong/mature, local, owns the title plant for the county I'm purchasing in company. I'm not going to pick the national brand that is going to outsource every step of the process and eat up time when an issue arises.

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3 How to avoid hidden fees and charges?

Another common pitfall that home buyers face is paying more than they expected for title insurance due to hidden fees and charges. Title insurance fees vary depending on the provider, the state, the property value, and the coverage level. However, some providers may also charge additional fees for services such as title search, title examination, closing, escrow, recording, courier, wire transfer, or endorsements. These fees may not be disclosed upfront or included in the initial quote, so you should always ask for a detailed breakdown of all the fees and charges before signing any contract or agreement.

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4 How to negotiate title insurance fees?

One of the best ways to avoid overpaying for title insurance is to negotiate the fees with the provider. Many home buyers do not realize that they have the right to shop around and choose their own title insurance provider, and that they can negotiate the fees and terms with them. You can use online tools and calculators to compare different providers and rates, and use this information to leverage a better deal. You can also ask for discounts or waivers for certain fees or services, especially if you are buying a new construction or a property that has been recently insured. You should also review the provider's policy and coverage carefully and make sure that you are not paying for unnecessary or duplicate coverage.

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5 How to avoid title insurance scams and frauds?

Unfortunately, there are some dishonest individuals and companies that may try to scam or defraud you when it comes to title insurance. Common signs of title insurance scams and frauds include asking for upfront payments or deposits before providing any service or documentation, offering extremely low rates or guarantees, not having a physical address or contact information, not having a license or accreditation from the state or national authorities, and pressuring you to sign documents without reading them. To avoid falling victim to these scams and frauds, it is important to do your research and due diligence on the provider, verify their credentials and references, and read and understand everything before signing anything. Additionally, any suspicious or fraudulent activity should be reported to the authorities and your real estate agent, lender, or attorney.

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Nicolette Kimmel

Designated Broker
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I find it helpful that everyone on the closing team is very clear on how and when they communicate about money and that is communicated well to the client from the beginning. I never ask for financials in email and ask that the entire team do the same.

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6 How to file and handle a title insurance claim?

If you have chosen a reliable title insurance provider, you may still need to file and handle a title insurance claim if there is a defect or lien on the property’s title. To do this, you should contact your provider immediately and provide them with all relevant documents and evidence. Additionally, cooperate with your provider and follow their instructions and guidelines. Make sure to keep track of all communication and transactions with your provider, as well as any other parties involved. It is important to be patient and realistic throughout the process, as it may take time to resolve the issue. You may also need to compromise or negotiate in order to reach a satisfactory outcome.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the common pitfalls and mistakes to avoid when choosing a title insurance provider?

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1 What is title insurance and why do you need it?

2 How to find a reputable title insurance provider?

3 How to avoid hidden fees and charges?

4 How to negotiate title insurance fees?

5 How to avoid title insurance scams and frauds?

6 How to file and handle a title insurance claim?

7 Here’s what else to consider

Working with First-Time Home Buyers

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