insurance

4 ways to save on title insurance

These add-on expenses include mail and courier charges, copy fees, and costs for searches and certificates, says Armando Montelongo, a San Antonio-based investor who conducts seminars on real estate.

"Often, reducing your expenses can be as simple as calling up the title insurance company and saying, 'I really do not want to pay these fees, can you remove them?'" Montelongo says.

He adds that if a title insurance company balks at removing the expenses, a buyer can always look for another provider.

3. Ask for the "simultaneous issue rate." Homeowners buy title insurance to protect themselves. At the same time, their mortgage company will likely require that a separate insurance policy be issued in the lender's name.

It is typically the borrower's responsibility to pay for both, Castellanos says.

"Most people need a lender to help them finance the purchase of their home," he says. "The bank partners with you, but they need to be protected and confident that they have a valid first lien against the property, so they require this insurance."

Although the two insurance policies are independent of each other, there is a way borrowers can purchase both and save money, he says.

"When the policies are issued at the same time, in some states, there is something called the 'simultaneous issue rate,'" Castellanos says. This is when the premium for the lender's insurance is highly discounted.

As a result, the total title cost for both policies is usually a lot less than if they were purchased independent of each other, he says. Castellanos advises all buyers to ask for this discount.

4. Ask the seller to pay for your policy. In real estate, anything is negotiable. That means buyers can request that sellers pay for title insurance.

According to Edward Mermelstein, a real estate attorney with Rheem, Bell, and Mermelstein LLP, in New York, asking the seller to pay for title insurance traditionally has been an unusual request.

However, Mermelstein says in the current economy, it's a buyer's market. That means sellers are motivated and may be more willing to negotiate.

"We are living in an uncommon real estate environment," he says. "Until the market turns around, you will see people financially negotiating on every term, including asking someone to pay for their title insurance."

However, Mermelstein cautions that it's important for buyers not to lose sight of the overall goal, which is to close the sale.

There are many other concessions buyers can ask for in a deal -- such as a reduced purchase price or a home warranty -- that could turn out to save them even more money than having the seller pay for title insurance, he says.

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