The next step in purchasing a home is the title insurance.
In previous chapters we have covered the steps we have taken to get to this point. We have found a house, negotiated the price and terms. We discussed the attorney review period and receiving the mortgage commitment. Then we talked about the various inspections.
Once we have completed the above items, it’s time to discuss an important, and expensive phase of the purchase process. This is the title search, title insurance and the survey. Since these are expensive, we don’t proceed to this step until the previous steps are complete. The title work can usually be completed in about one week. In emergencies a 24 hour turnaround is possible. Your attorney takes care of ordering these.
Let’s do the easy one first – the survey. This is important since you need to know exactly where the property boundaries are. Your attorney places the order for the survey.
The Title Search
What is a title search? Your attorney orders a title search from a title company. The title company will research to make sure that there are no defects or liens on the title. This will ensure that you receive a clean title and don’t inherit someone else’s problems. If issues do arise, the seller must clear the issues or we won’t continue to closing. Once the title company has cleared any issues, they can then provide a title insurance policy. This means if any title issues arise after closing, the title company needs to take care of the problem. Here are a few examples of the costs involved for title insurance, the survey, the title search, settlement costs and miscellaneous expenses. The title insurance rates are set by the state and are calculated according to the purchase price.
A home selling for $250,000 has costs of around $2683. A house selling for $500,000 is $3746. And a house for $750,000 is $4434.
Next we will discuss the closing.
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