how does title insurance affect agents?

Question

Hey everyone.  I'm studying for my license in PA, and I'm reading about title insurance.  How does this affect agents?  Do we need to bring up title insurance to our clients?  How deep does our job take us into issues with titles and insurance?

William Plymouth · Answer

Hey everyone thank you for all your answers.  Sorry for the delayed response.  My notifications stopped showing up after the first response for whatever reason.

Gregory H. · Answer

@William Plymouth The advice on here that says lawyers handle title is state-specific. In PA, the vast majority of transactions occur without legal counsel. That means you need to know title companies to refer your clients to when you are working with them as a buyer's agent. Yes, many brokerages own title companies, and that is a good place to start, but I wouldn't rely on a title company just because they are connected to your brokerage, you should have at least one or two more in your pocket just in case.

Chris Mason · Answer

Here's how I explain title insurance, with a true story about myself, @William Plymouth.

Note that in Southern California and other states, it may be the lawyer, title officer, or some other party, that you e-mail. Here in NorCal, title and escrow are amalgamated and title officers are like mythical beings you read about, but never talk to or meet.

Also note that since I don't do vacant land lending or $5k mortgages, I'm never actually suggesting to someone that they might consider skipping title insurance. You could have a vigorous debate about if it's worth insuring title on a $5k plot of land, but I will not be a part of that debate. :)

Chris K. · Answer

@William Plymouth

In Pennsylvania, attorneys and brokerages own (or partially own) many of the title companies. So as a realtor, your brokerage likely will have a title company that it uses as default. The other posters are correct, however, that the buyer's attorney typically has the final say on the matter since they are the ones that actually have to examine and address any potential title issues.

Christopher Phillips · Answer

@William Plymouth

@Robert O'Keefe is correct.

The attorneys will handle that with the title company and the lender. Ultimately, if you representing a buyer or a seller, you just need to direct them to speak with their attorney, but they might ask you about the process.

In most cases,  the lender will order title insurance to protect themselves and the buyer pays for it as part of their closing fees. The seller will order an owner's policy for themselves. On occasion, the seller will pay for the title insurance for both parties. So, you have to go by local customs.

Then the question comes up for cash buyers. They should still get a policy for themselves. Things go wrong all the time with title issues. Lately, it's been mostly about property boundary issues. But, on occasion, there are other things like paperwork errors, fraud, liens and other claims that weren't in the title records.

William Plymouth · Answer

Thank you.

Robert O'Keefe · Answer

The attorneys will handle the title insurance for the client.