As a real estate professional, you already know how important title insurance is. It’s the difference between a successful home purchase and an unsuccessful one—so its importance cannot be overstated. However, many first-time homebuyers might not be aware of everything title insurance encompasses.
We’re here to assist you in helping your clients understand how important it is to have an effective title insurance policy protecting their investment. So, here are three tips for getting your clients to better understand title insurance.
Give Them an In-Depth Rundown of Title Insurance
It’s your job to act in your clients best interest, and do everything you can to educate them on their home purchase and everything that involves. As such, it’s important to be extremely clear with them as you go over title insurance.
So, if your client asks you to explain title insurance, be clear with them. However, it’s not enough to simply give a definition. You have to explain why title insurance is so important, and the best way to do that is by listing examples for the very problems title insurance protects buyers against. There are many issues that can arise from a faulty title—and title insurance helps protect your clients financially.
Plus, it’s also helpful to clarify that title insurance is not the same as property insurance. While property and homeowners insurance protects the buyer against events that might happen in the future, title insurance protects them from fraud, negligence, and other issues that might have happened in the past.
Explain the Benefits to Having an Owner’s Policy
First, your client may be confused over the difference between an owner’s title policy and a lender’s policy. Lenders in North Carolina typically require the buyer to have a lender’s title insurance policy in place to protect their investment. This policy covers the lender for the duration of time that the buyer is paying off their mortgage loan.
Owner’s title insurance, on the other hand, protects the homeowner for the entire time that they own the property.
When a buyer applies for title insurance, their elected title insurance agency does a title search on the property’s title’s history. This way, they may be able to uncover any potential issues or defects with the title that would negatively impact the buyer later on down the line.
It is important to note that the title search may not uncover every single issue on the title—especially if those issues are a result of fraud or forgery. However, having a title insurance policy means that the buyer’s financial investment in the property will be protected.
Be Honest with Your Clients About the Costs of Title Insurance
Buying a home is expensive, and many buyers don’t realize just how expensive it is until they go through their closing. After all, in addition to the down payment, closing costs end up totaling anywhere from three to five percent of the home’s overall price.
Due to misinformation, your client may be under the impression that title insurance requires a monthly premium payment like homeowners insurance. However, title insurance only requires one premium payment made at the time of closing.
Title insurance in North Carolina is highly affordable and beneficial. Not only does it protect the homeowner for the amount of time they have an interest in the property, it also protects their heirs’ right to the property as well.
Searching for a North Carolina Title Insurance Policy?
Our team at Tryon Title is here to help! Give us a call today to explore title insurance policies for your real estate clients.