Title insurance is basically insurance to make sure you’re buying what you think you’re buying and if that sounds strange, it is. Only the U.S. has title insurance. It’s a little bit easier to understand if you look at some examples as to what title insurance covers. The most extreme example is fraud. If you buy an apartment from Bob but Bob doesn’t own the apartment, you have a problem. More commonly and less significantly, it’s things like unpaid property taxes or unpaid contractor bills that come with the apartment. If any of these issues are found after you close, that’s when title insurance kicks in. In order to minimize those chances, the title company basically does a bunch of homework before you close. They’ll look for liens. They’ll double check the property records. And if they find any issues, it’s a seller’s responsibility to fix them before you close. Title insurance rates are essentially set by the state so it doesn’t matter where you get them. The exact amount will depend on the price point and if you’re financing, but usually it’s about 0.4-0.5% of the purchase price. On top of that there’s another thousand dollars or so of ancillary fees. In the description below, we have a link to our title insurance calculator but in order to be 100% sure, you should get a good faith estimate from a title company. The most common question we get from buyers about title insurance is: do they need it? And the short answer is yes. If you’re financing, the bank will require you to get a title insurance policy that at least covers the mortgage amount, and even if you’re paying cash most attorneys won’t work on your transaction if you don’t get title insurance. They’re basically too many tail risk scenarios that they don’t want to deal with. While you can’t negotiate the price of title insurance, if you use Yoreevo to buy the apartment, you’ll get commission rebate for up to 2% of the purchase price which will more than pay for your title insurance. To learn more you can contact me directly at james@yoreevo.com.
