Michigan Title Insurance 

 In metro Detroit real estate transactions and refinancing title insurance costs sometimes make up the majority of the closing costs.  It is not unusual for title closing costs to be over $1000.   I recently had a $12,000 cash home purchase deal quoted.  The title insurance was $279 and the closing cost was $200.  That was almost 4% of the price of the home!  Sometimes I am outraged at the costs but then I remember what how it protects the Metro Detroit Home buyer.

Title companies issue a title policy and you pay an insurance premium for the title policy.  They issue you a title commitment showing what liens have to be paid off at closing.  The title company requires that for clear title.  Banks require that to get a mortgage. 

The title insurance premium pays for the time prior to the date of closing.   That shows the title is now clear at the date of closing and that all prior liens are gone.  That is what you pay title insurance for.  You want that .  You want the comfort of knowing your home has no claims on it.  That is what you pay title insurance for.

But the title insurance premium is so helpful when there are title issues that arise after a closing.  In Metro Detroit a few years ago a builder went out of business.   He had sold homes, closed on them, but had not paid all the contractors.   When the builder went out of business the contractors started putting liens on the sold Metro Detroit homes.  The home owners contacted the title insurance company.  The title insurance company that had the title policy had the responsibility of making good on having a clear title.  Even though the contractors put the liens on after the closing they had don the work prior to closing and were due money.  The title insurance company paid off the contractors to get rid of the liens.  The Metro Detroit home owners now had clear title.

At a closing I was just at 4 months ago the title insurance company issued a title committment.  There was no mention of overdue taxes on the commitment.  But after the closing Wayne County recorded a over due tax bill on a change of homestead taxes.  I knew nothing about it and the title company knew nothing about it.  But they would have been liable for the tax bill, and not the new homeowner.  The title has to be free of liens at the time of closing.

In Wayne County Mi takes a while to record items.  So sometimes items get missed by the title companies.  Title insurance protects you from those mistakes.   For more on Metro Detroit mortgages or Michigan mortgages go to the side categories.

My thought of the day is "The three great essentials to achieving anything worthwhile are; first, hard work, second, stick-to-it-iveness, and third, common sense."   Thomas Edison