Silicon Valley Real Estate Info

I recently met with a potential seller who had a great question regarding title policies.  When they bought their house, they bought a title policy.  If they sell their house, they’ll be buying another title policy.  They wanted to know why they had to pay for a title policy when they bought their home and then again when they sold it?  To answer this, we need to define the two types of title policies. 

Owners Title Policy

In Santa Clara County it is customary for the seller to pay a one time premium for the new buyer’s title policy.  The amount of the title policy is based on the sales price of the property.  The owner’s policy indemnifies the buyer against loss and provides a defense in the event of claims against the buyer.  Coverage last as long as the buyer remains on title.

The Owner’s Title Policy protects the new homeowner (buyer) from:

1. Fraud associated with the title ownership
2. Liens existing against the property at the time the policy was issued
3. Mistakes in the public record that are not caught before the sale
4. Inaccurate or conflicting wills and trusts related to the title
5. Missing heirs who suddenly appear and claim to own the property
6. Forged or misfiled deeds and other documents
7. Errors or flaws in the title that are not discovered in the initial title examination

Lender’s Title Policy

In Santa Clara county it is customary for the buyer to the pay for title insurance premium for the Lender’s policy on the home loan.  The amount of the policy is based on the amount of the loan, not the purchase price of the property and covers the lenders interest in the property if any of the above (1-7) occur.

Click here to find out who pays for title costs (it’s based on the county where the subject property is located).

Comparison Shopping for Title and Escrow Services

Los altos no longer has several title companies in town.  Most offices have either consolidated or closed business altogether.  Consumers can ask their real estate professional for a reputable title and escrow company and/or go to Title Wizard to compare title and escrow fees and services. 

Lastly, below are tips that the Title Wizard web site recommends when comparing title and escrow fees, policies, coverages etc.