Here’s how title insurance works and why it’s important for buyers.
“Why do I need a title company?” I’ve received this question from clients quite a bit recently, so I wanted to address it here today.
In Ohio, we use title companies, or title agents, in nearly every real estate transaction. In other states, mostly on the east coast, attorneys do the closing and title work, which can get expensive quickly. There are plenty of title companies in Northwest Ohio, but they all use the same underwriting document produced by a handful of companies.
To make things even more complex, you can’t just shop around for title companies. Instead, you need access to a title plant, which is a searchable database of policies that make your title insurance stronger.
“I recommend all buyers get title insurance, even if they don’t have to.”
So if you have a closing agent, an underwriter, access to the county records, and access to the title plant, you can get a title policy. All insurance rates are regulated by the state, but insurance isn’t absolutely necessary to close a transaction. However, if you’re using a bank and don’t want title insurance, most of them won’t give you a loan.
Cash buyers are the only people who can realistically buy without title insurance, but most of them get it anyway. This is because title insurance protects you from past owners claiming ownership of your property and saying you don’t have clear title. On top of that, the insurance has no deductible, no premium, it never expires, and your insurer will fix any issues free of charge.
Title insurance is unlike any other insurance, but it’s worth it. I’ve only seen a few title insurance claims happen, but when it does, it can be catastrophic. If you have questions about today’s topic or anything else, please call or email me. I am always willing to help.
