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Buying a home in Williamson County with The Grumbles Team - Buyer Seminar part 1

Buying a home in Williamson County with The Grumbles Team - Buyer Seminar part 1

 

The Grumbles Team takes the time to consult with buyers of all experience levels, but especially first time buyers or buyers that have not purchased in TN before or did so many years ago.  We offer a brief education on the process of buying and explain the steps that will occur before we start to move.  We like to think of it as the yellow-brick road,  the saying goes Follow the Yellow Brick Road... Don't you want to know the Yellow Brick Road isn't full of pot holes and roadkill before you take that next step? 

So today I want to briefly inform the blog followers about 1 piece of the buying process that is often times a point of confusion.  That point is Title Insurance.  What is it?  Who pays for it? Can I get a better rate if I shop for it?  What is customary for buying Title Insurance? Is it required?  Are there levels of coverage?  So many questions on just this topic alone and it is often one of the items that is brought up last when deciding to buy a home. 

Well, lets first talk what it is.  Title Insurance is just that insurance protecting you for the safe use and enjoyment of your Title to the property.    The best way to further explain that is an example.  Lets say you buy a house on 0.5 acres of land.  Then a few years after that purchase a knock at your door and the visitor shows you a Deed where his grandfather had left him this 0.5 acres of the 10 acre farm that was subdivided into a neighborhood where you now live.  You contact your Title Insuracne agent and explain the situation and they will defend you in any litigation and they will make you whole by eihter buying your interest in the property to convey it to the grandson or they will buy out his interest so that you may continue to enjoy the property.  The issues arise when your property has appreciated and is wiorth more than what you bought it for and thus worth more than the Title Insurance Policy.  There is a way to protect for that appreciation (to an extent) and that is by purchasing an extended or enhanced policy vs a standard policy.   There are other benefits to enhanced policies as well so speak to the Title Agent about those details.  These added benefits may include added coverage like easements or encroachments. 

The time to buy Title Insurance is when you buy the property?  The cost can be explained in detail by a title agent, and does differ from county to county, but I can usually estimate it so you know the magnitude as $4.5 per $1000 of purchase price.  So for example in rough numbers a $400,000 house would be about $1800 for Title Insurance.  With this much money on the line, the who pays for it in the real estate sale is BIG.  The TN Real estate forms that are published by TAR (Tennessee Association of REALTORS) states that it is negotiable so there is a blank to line fill in buyer or seller to buy the Title Insurance.  However, it also states that the seller "warrants that they will convey to the buyer a good and marketable title" and in my opinion the only way that they can do so is via a Title Insurance Policy.  However, in the negotiations either side could end up having it as a debit on their closing statement (HUD-1).

You obviously want to protect your interest in the property but in most cases the bank or mortgage company is more vested in the property financially than you are so they mandate a title policy to protect them and then you have a policy to protect your interest and the agency will issue those at the same time fora a huge cost savings.  My agent charges under $50 for that 2nd policy.

 

You do not have to buy Title Insurance, but the lender mandates it so if you are financing your purchase you need to consider that cost. 

I hope that you gained a better understanding of Title Insurance and how it plays a part in home ownership and in the real estate transaction.  If you have a title horror story, please post in the comments.

Looking for a Franklin TN home? Our website has all the listings and we can unlock every door in Franklin for you!

 

 

   

Franklin | Brentwood | Spring Hill | Mike Grumbles & The Grumbles Team specializing in Franklin TN Community Homes for Sale

The Grumbles Team is our family serving your family with your real estate needs in Franklin, Tennessee 615-587-5843.

Your Williamson County REALTOR!

EXIT Realty of the South | 1227 Lakeview Dr. Suite 1 | Franklin | TN | 37067 | 615.550.5555

 Williamson County Real Estate Agent

Each EXIT Office Independently Owned and Operated

 

 

 

 

 

 

 

 

As always for a detailed explanation of Title Insurance or to make sure you have enough coverage, call my team member Mark Dougal at DLO Title.

 

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