How much a title search costs will depend on what company and professional you choose to conduct it for you and whether or not you get it as part of a package deal. In general, a title search on its own will cost you somewhere between $100 and $250, though that number varies by location and company. 

There are several ways you can try to lower the cost of a title search; the most obvious being a simple comparison among title professionals such as title companies, mortgage brokers, real estate attorneys and real estate agents in your area. A lesser known strategy is to contact the company that currently holds the title insurance policy on the home in question; since they still have the old title search on file, they will often offer you a lower price or they might give you a better title insurance policy at the same price.

As you probably already know, most mortgage lenders will require a new title search on any property you hope to buy. A properly conducted title search will establish an unbroken chain of ownership going back 40 to 60 years, depending on your local requirements. This chain is important because any improper transfer of property will void the entire line of ownership, and the title could revert back to its last legal owner. A title search will also show any outstanding debts on the property including mortgages and liens and any back property taxes owed by previous residents. Knowing these details in advance is important because if you end up buying a home with old debts, you become responsible for paying them. 

Most companies that offer title searches also offer title insurance, which is a product that can protect you in case their search was incomplete. Your lender will also likely require you to take out a title insurance policy before they will offer you any financing. In most cases, a basic title insurance policy will protect only your lender in case there is an ownership dispute in the future; if you lost the home in a dispute, the typical title insurance policy would pay off your mortgage but offer you no compensation. Many title companies will offer owner title insurance policies that protect not only a lender, but the homeowner too, though these policies are more expensive than a basic plan.

Who pays for a title search is also not necessarily set in stone. The buyer of a home traditionally pays for a search, but if your housing market is in particularly bad shape, you might be able to convince the home owner to pay up for a search themself. Most will be reluctant to do so, but depending on your circumstances, you just might be able to save a few hundred dollars with good negotiation. After all, your lender will only require that a new title search be conducted on property, and they will rarely be adamant about who must conduct it.

add comment – Aug 13, 2012 – flag