What is Title Insurance in Pennsylvania?
In this video, Rob talks about title insurance in PA. He explains what your title agent's responsibilities are and why having title insurance is so important when buying a home.
Your car has a title that shows ownership. When you sell the car, you transfer the title to the new owner so they can claim it as theirs. If you take out a loan against your car, the lender will hold the title until they are paid back. This is called a lien. In real estate, titling works the same way. When you buy a home, you need to make sure that there are no liens against the title. Your title agent and title insurance protect you from buying a home with a lien on the title.
What Does a Title Agent Do?
Your title agent’s primary responsibility is to make sure your title is free and clear from liens and other issues. Our title company, Vanguard Settlement Services, does about 300 titles a year. We research the title to make sure there aren’t any liens for back taxes, repairs, or other issues. In Pennsylvania, your title agent will go with you to closing and handle all the paperwork. They make sure that everyone who is owed money at closing gets their cut.
Why Title Insurance is Important
Title insurance serves a dual purpose. It protects you and your lender from losing money. Let’s say you buy a home and the title transfers to you without an issue. If a family member of the previous owner says that the home is rightfully theirs and that they didn’t have permission to sell the home, your title insurance agent is going to resolve that sticky situation for you. Typically, issues like this are spotted when your agent checks ahead of time to make sure the title is free and clear to be transferred. Title agents don’t want insurance claims, so they perform their due diligence before closing to make sure there are no liens on the title.
Your mortgage lender definitely wants you to have title insurance because if you were to foreclose on your home, they don’t want there to be any issue when they go to claim your home’s title. That’s why most lenders won’t give you a mortgage if you haven’t purchased title insurance.
How Much is Title Insurance in PA?
Title insurance pricing is fixed by the Pennsylvania government, so you are really just shopping for the best agent, not the lowest rate. Title insurance is included as part of your closing costs, and it will be about three-quarters of one percent of the price of your home. You have the option to upgrade to premium title insurance, but most buyers stick with the basic package.
Contact the Rob Lawrence Team
If you are buying a home in Pennsylvania, the Rob Lawrence Team can help you find the right real estate and title insurance agent. Rob is licensed in PA, MD, and DE, and we proudly serve Chester, Montgomery, Delaware, and New Castle County. Our team is based in West Chester, and we are here to help you meet your real estate goals.