What is title insurance and why do I need it?
Buying a home is the single largest investment most people make. Title insurance provides important coverage to protect your investment and interest in the property. If protects you from hidden problems that can arise after closing that might challenge the ownership of the property – examples: unpaid mortgages, unpaid taxes, child support liens, missing heirs who could claim ownership, missed easements, etc. Title insurance offers financial protection against these hidden hazards by paying claims and legal fees involved in defending matters that affect ownership – the TITLE.
Who pays for title insurance?
While there is no legal mandate as to who pays for the policies and the parties to the transaction can agree to divide the costs and fees as they see fit, the custom in Michigan is for the seller to provide an owner’s policy of title insurance to the buyer and the buyer provides a loan policy of insurance to the lender.
Title Companies also serve as settlement facilitators
Title companies also often act as neutral third party settlement facilitators for the real estate transaction, often referred to as the closing agent or escrow agent. They receive the money, record the documents and disburse the sale and loan proceeds according to the instructions agreed upon by all concerned.
You have the right to choose your title company.