Title Insurance: Educating Your Clients

Many mortgage lenders and other real estate professionals are pushing to educate homebuyers more about their rights and available choices during a property transaction. These efforts are part of an initiative begun by the Consumer Financial Protection Bureau (CFPB) to add transparency and greater measures of proactive protection for home buyers.

To stay competitive within the industry, lenders are making their business models more transparent and instituting a more positive closing experience for borrowers. Real estate will likely follow suit as the need to educate clients will become a defining factor for remaining viable in this the new consumer-oriented market. Visit Marina Title’s Buyers and Sellers page for more information.

Why Title Insurance Makes Sense

Whether because they are unfamiliar with the product’s benefits or are simply unaware of its existence, many homeowners do not buy title insurance. As their real estate representative, Realtors can explain the importance of a title insurance purchase for protecting their newly-owned property.

Put simply, title insurance has one of the biggest cost-to-potential-benefit ratios of any product. A one-time fee can protect a property indefinitely or until sold. If the buyer keeps the property until death and bequeaths it to an heir, that heir will inherit the benefits of the Owner’s Policy without any added expense.

When a client completes a home purchase, he or she is essentially just buying a title. That title gives him or her rights to the property to live in it and enjoy the privileges of ownership.

By purchasing an Owner’s Policy, new property owners will have their assets protected from legal disputes that could produce costly trials and potentially strip them of their rights of ownership. Typical coverage includes protection from:

• Property liens
• Legal discrepancies as a result of contract wording or procedure
• Fraudulent claims or disputes related to forgery
• Contested ownership, such as a partial property heir coming forward
• Lack of a right to access, such as an easement affecting construction rights

The Trend Toward Consumer Education

Given your position in the real estate industry, you have an opportunity to inform your clients about the benefits an Owner’s Policy will offer them. They may be confused about the product’s superficial similarity to homeowner’s insurance, or they may think that their Lender’s Policy will prove adequate protection. Since neither of these beliefs are accurate, Realtors can steer them towards a decision that will protect their assets in ways that improve the overall home-buying experience.

Going above and beyond the typical level of service in this way can increase your reputation among client markets, especially when it comes to positive referrals. Clients who would have normally been embroiled in a lengthy and pricey court case could spare himself the ordeal by purchasing title insurance at the suggestion of his real estate agent.

For more information regarding the benefits of title insurance, email us at [email protected] or give us a call at (305) 901-5628.