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Estimating Title Insurance Costs

November 14, 2010 By Doug Francis

Lawyers Title Building

Image by rmanoske via Flickr

When I review estimated closing costs with home buyers, we always spend time looking at Title Insurance because it is typically one of the largest expenses on the worksheet. Since most people buying real estate are going to have a mortgage, title insurance is going to be a requirement of the lender if you want them to provide the loan. Title insurance is purchased at the time of closing/settlement.

In Northern Virginia real estate, it is customary that the home buyer purchases the title insurance policy. In some states the cost is split between buyer and seller.

Now, let me be clear that I am not an attorney nor am I affiliated with a Title Insurance Company, I am a licensed real estate agent who has seen the benefits of having a policy in hand when transactions are happening. One example was when clients were selling their home and the new title search uncovered an unsatisfied lien from 1969… three owners ago! When they had bought the house I recommended they buy “owner’s coverage”,  so they provided the title insurance policy and their house sold on time. There was another issue when a mortgage lender had not recorded as Certificate of Satisfaction when the owner had refinanced the home… again, the title insurance policy saved the day.

I advise that all my clients buy an “owner’s policy” which includes the lender’s required coverage too. It typically costs just a few hundred dollars more but is essential just in case a future issue emerges after closing on the house.

  • Home buyers paying cash are also advised to include a title insurance policy.
  • New home buyers are advised to buy a title insurance policy that includes Mechanic’s Lien coverage.

My Cost Estimate for Virginia: I multiply $4.90 x each $1,000

So, if the sales price is $450,000 then the estimated title insurance will cost $2,205.

If the property you are planning to buy was bought within the last four years, try and get a copy of the seller’s existing title insurance policy to provide to your closing attorney or title company. With that in hand, you should get a good discount because the policy will qualify for a Re-issue Rate saving around 30%.

Home buyers should also ask the title company to ask what the cost difference is between a buyer’s standard policy and an enhanced policy.

There are plenty of web sites that will explain to you the many reasons behind the importance of having title insurance policies on your home. For more information, The American Land Title Association (ALTA) provides consumer information on their web site.

Also, read about why home buyers also need to obtain a HomeOwners Insurance Policy.

Related articles
  • A Look at Title Insurance (stroupecondoblog.com)
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Filed Under: Blog, Home Buyer Tips Tagged With: buyer agent, Northern Virginia, real estate, tips, Title insurance in the United States

About Doug Francis

A Realtor specializing in unique and new homes around Vienna, Virginia, Doug started writing a first-hand blog about his everyday real estate experiences a decade ago. In depth, helpful and fun has always been the objective. Outside real estate, he "starred" in a tech commercial for Verisign's "Where the World Clicks" campaign, and was quoted in Money Magazine's Best Places to Live article on Vienna. He's a Boston University graduate who feels morning coffee is non-negotiable.

Being able to guide my clients through many real estate sales, either moving out, moving in, or just across town, has been a rewarding experience that helps when discussing a plan with a future client.

Being able to help them focus and understand our proven sales plan always eases their anxiety of this looming personal task. And, putting it into bite-sized steps always helps them get where they really want to be.

My background… I’ve been an active licensed agent in Virginia for 25 years, work at TTR Sotheby’s International Realty in McLean, and sell homes in all price ranges. I donate to the town tree replacement fund, participate in a neighborhood citizens association, and try my best to stay in shape.

Questions? Email doug@dougfrancis.com or call me at (703) 304-6827 to discuss your plans. Cheers!

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About Doug Francis

I am a Realtor with TTR Sotheby's International Realty® just outside Washington D.C. in Northern Virginia. I have been a full-time Realtor licensed in Virginia since 1991, and cover a big territory specializing in the Vienna real estate market and custom homes for sale.

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