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Title Insurance Basics for Brokers and Realtors

By Cody McCaughan, Esq.

Make sure your clients are protected

You’re a real estate agent, so you know that buying a home can be overwhelming for many of your clients. Homebuyers can easily feel confused and frustrated by the mounds of paperwork they have to sign. Plus, all the fees associated with closing can sometimes be a surprise even to an experienced buyer.  Owner’s title insurance is one of those items often misunderstood by homebuyers at closing, yet its value is tremendous. As an important advisor to your clients, you are in the position to help them understand the value of owner’s title insurance and the dangers that can be incurred without it.

What is title insurance?

Owner’s title insurance is a policy that protects homebuyers’ property rights. For the same reasons that the bank requires a lender’s insurance policy, a homebuyer obtains owner’s title insurance to protect their legal claims to the property.

How does title insurance protect your clients?

Say, for example, your client recently purchased a new home from a builder, but the builder failed to pay the roofer. Wanting to be paid, the roofer filed a lien against the property. Without owner’s title insurance, your client would be responsible for paying this existing debt—meaning they’d be paying the roofer out of pocket instead of purchasing something nice for their new home, like new living room furniture. This is just one example of how owner’s title insurance protects homebuyers’ from various significant risks. With owner’s title insurance, your client would be protected from certain legal or financial responsibilities.

Is title insurance worth the cost?

The good news is that owner’s title insurance protects homebuyers financially, as long as they or their heirs* own the home. For a low, one-time fee (average of 0.5% of purchase price), homebuyers can rest assured, knowing they are protected from inheriting existing debts or claims to their property.

State Regulations and CFPB

Each state government regulates its own title insurance costs. In addition, the Consumer Financial Protection Bureau (CFPB) regulates closing and settlement practices which can impact title insurance. Keep in mind that title insurance industry practices vary due to differences in state laws and local real estate customs. The party that pays for the owner’s title insurance policy varies from state to state, and sometimes even within a state.

Contact Us

We are a title insurance agent of Old Republic Title and a member of Attorneys’ Title Insurance Fund, the premier organization providing support for real estate attorneys in Florida.  For a no-charge consultation, including a quote for attorney representation and title insurance, contact us at (305) 928-4190.

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Cody McCaughan, Esq.

Mr. McCaughan is the founder of Mac Law PLLC, a law firm dedicated to serving individuals and businesses in the areas of real property law and business law. After graduating magna cum laude from the University of Miami School of Law, Mr. McCaughan practiced business litigation in Fort Lauderdale, Florida, before deciding to start Mac Law PLLC. He is a title insurance and settlement agent of Old Republic Title, and currently serves as “of Counsel” for a prominent South Florida real estate law firm. Mr. McCaughan is a native of Miami, Florida, and is active in the legal community, regularly volunteering as a Pro Bono Attorney at Legal Services of Greater Miami and previously receiving the Pro Bono Certificate of Achievement from the University of Miami. In addition to his law degree, Mr. McCaughan holds a Bachelor of Science in Business Administration from the University of Central Florida. Call for a consultation at (305) 928-4190.

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