Real estate ownership is complex, and all properties have a long history of ownership. Anywhere in that history, there could be issues that interfere with your home title, meaning the legal ownership of your property . That’s the reason title insurance exists. Typically issued at the time of transfer of ownership, title insurance protects property buyers and mortgage lenders from financial losses due to defects or issues with a property’s title. Title insurance can protect the policyholder’s title by engaging in the legal aspects to defect a disputed title.

Things that can pop up during your ownership can include;

• Liens: Prior owner’s unpaid debts (e.g., taxes, contractor bills)
• Easements: Other’s rights to use part of the property, such as neighbors with access rights.
• Forgery or fraud: Past deeds, wills or transfers which may have been falsified.
• Boundary disputes: Discrepancies in property lines or survey errors
• Undisclosed heirs: A relative of a previous owner may come forward with a claim
• Errors or omissions in public records

If you are financing your home purchase or even refinancing your existing mortgage, you will need to purchase a LENDER’S TITLE INSURANCE POLICY to protect their financial interest in your property. When you take out a mortgage, the lender requires assurance that the title is clear of issues like liens, ownership disputes, or other claims that could affect their ability to recover the loan if you default. While this policy primarily benefits the lender, it is a standard requirement in most financed real estate transactions. However, it does NOT cover you as the buyer.

You need an OWNER’S TITLE INSURANCE POLICY to protect your personal investment in the property. While a lender’s title insurance policy protects only the lender’s interest, the owner’s policy shields you from potential financial losses due to unforeseen issues with the property’s title.

Title insurance costs vary based on factors such as property’s value, location, and whether you are purchasing owner’s or lender’s coverage. Generally, title insurance premiums can range from $500 to $3,500 or more, and in many states, the specific rates must be filed with the State regulatory agency to ensure fair and accurate premium collection. 

Owner’s title insurance provides coverage for up to the full purchase price of the home and lender’s title insurance for up to the loan amount, and as the loan is paid down, the lender’s coverage decreases.  Both are a one-time expense offering long-term protection.

Title policies are typically not transferable to a new owner or a new lender, though discounted rates for a new policy may apply if a policy is currently in place.

For Sale By Owner Overview

Did you know up to 15 percent of Minnesota real estate transactions are made without the assistance of a professional real estate agent? For sellers, the primary thought is so they can save money by not paying commissions to agents involved. For buyers, they may find they get a better price since the seller does not have to pay any commission.

Eliminating the need for a real estate professional does present its challenges, however. Most buyers and sellers do not have the knowledge or expertise to effectively negotiate or navigate the legal ins and outs of a purchase agreement, city required inspections, homeowner’s association disclosure stipulations or proper earnest money retention, to name a few. Not to mention the limited exposure to interested buyers and scheduling/managing their own showings. It’s often that important legal requirements are forgotten, and misunderstandings can occur.

Still, these transactions, often referred to as a FSBO (For Sale by Owner), are not at all uncommon.  In these situations, real estate experts recommend all parties consult an attorney who specializes in real estate, to make certain all legal requirements are met. This helps protect both parties.

If you find yourself in a FSBO transaction, Trademark Title can be of service to you to ensure all bases are covered at the time of your closing.

• REVIEW OF PURCHASE AGREEMENT
  Once both parties have completed negotiations and signed their Purchase Agreement, our Trademark Title professionals will review it for accuracy and let you know if anything further is needed to get you to the closing table on time and with ease. It is important to remember that title companies cannot complete these forms for you as they are not licensed real estate agents nor can they provide you legal advice about the transaction.  However, we will make certain the purchase agreement is prepared correctly and answer any non-legal questions.
  *As recommended, an attorney is the preferred option for legal assistance, negotiations and preparations to best protect both parties*
• DIRECT COMMUNICATION WITH ALL PARTIES
  In a normal, agent-assisted transaction, most communication pertaining to the title process is funneled through the real estate agents.  In a FSBO transaction, the title company communicates directly with the buyers and sellers on all title matters.  Open communication is key to a successful transaction!
• FACILITATE THE CLOSING
  The closing process will be much the same as with an agent-assisted transaction. However, we are fully prepared to answer more in-depth questions and offer guidance due to the absence of a real estate professional.