Question re. Title Insurance Policy as Seller

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JI0124
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Joined: Sat Aug 08, 2015 1:06 pm

Question re. Title Insurance Policy as Seller

Postby JI0124 » Mon Jul 17, 2017 9:14 am

Hello,

We are selling a property that was purchased in 2003. It has been a rental property since 2013. I am trying to get an estimated settlement statement from the title company. I provided the Owner's Title Insurance Policy from the purchase in 2003, which includes a cover letter that says "if you sell this property in the future...by turning in this policy, a savings will result."

The title company that is working on this transaction has since said that we can't use the old title policy but has not yet provided an explanation as to why. What savings should I expect by providing the earlier policy? What are valid reasons for why they wouldn't be able to use it? I feel like they are using this as an opportunity to add unnecessary fees, however I admittedly don't fully understand hence the post.

Thanks in advance!

miamivice
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Joined: Tue Jun 11, 2013 11:46 am

Re: Question re. Title Insurance Policy as Seller

Postby miamivice » Mon Jul 17, 2017 9:19 am

The theory of title policy reuse is that the new title policy doesn't have to follow the chain of transactions prior to 2003 very closely since they were already investigated by a previous title inspection. Or perhaps it's a marketing ploy to get you to buy title insurance through the same company again. (I can't tell which, they are the better ones to explain it.)

Title insurance rates are often set by state law. I don't think they are adding unnecessary fees at this point.

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celia
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Location: SoCal

Re: Question re. Title Insurance Policy as Seller

Postby celia » Mon Jul 17, 2017 9:38 am

It seems to me that the savings would only apply if you used the same title insurance company again. Why would another company give you a discount? Only the original company, who did the earlier verifying, can claim the title is good by only going back to 2003. The others have to go back to the start.

You might be able to use this as a savings tool for your new buyer. But if I were to be the buyer, I might find it strange and want to avoid any possible collusion between you and your title insurance company. I would ask MY realtor for advice, since they assumedly would know about that title company.

adamthesmythe
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Re: Question re. Title Insurance Policy as Seller

Postby adamthesmythe » Mon Jul 17, 2017 10:16 am

JI0124 wrote:Hello,

We are selling a property that was purchased in 2003. It has been a rental property since 2013. I am trying to get an estimated settlement statement from the title company. I provided the Owner's Title Insurance Policy from the purchase in 2003, which includes a cover letter that says "if you sell this property in the future...by turning in this policy, a savings will result."

The title company that is working on this transaction has since said that we can't use the old title policy but has not yet provided an explanation as to why. What savings should I expect by providing the earlier policy? What are valid reasons for why they wouldn't be able to use it? I feel like they are using this as an opportunity to add unnecessary fees, however I admittedly don't fully understand hence the post.

Thanks in advance!


I don't know the details, but- turning in the policy (which limits liability to the original policy writer) and using the policy are two different things.

I can see that if you went to the original title company they might still have files and thus would be willing to offer a discount. Are you using the original title company?

Gropes & Ray
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Joined: Wed Jul 16, 2014 7:28 am

Re: Question re. Title Insurance Policy as Seller

Postby Gropes & Ray » Mon Jul 17, 2017 10:29 am

To save on title insurance, you have to use the same company that did your original policy. However, after 14 years, it is unlikely that there is much savings to be had. Most reissued policies have to be done within 5 years to get the discount.


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