When you are in the process of buying a new home, the last thing you want to worry about is finding out the home you wish to buy has a lien against it, or something worse, the homeowner isn’t the person you’re buying the house from. This is where title insurance comes into play.
Not only will this insurance protect the homebuyer, but it will also protect the lender.
Want to learn more about how much is title insurance in Florida? If so, you will want to keep reading on below! In this Florida title insurance cost guide, we will go over the importance of this insurance and who you can contact for alternative solutions.
What Is Title Insurance?
Before we get into how much is title insurance in Florida, let’s first define what title insurance even is. When you first buy, sell, or finance a home, the transaction is typically filed in the public archives. This allows people to know who is the registered owner of the house just in case someone tries to claim that they are the registered owner.
Title insurance is an indemnity insurance that protects homebuyers and lenders from any financial losses sustained from a faulty title. There are two types of title insurance: Lender’s title insurance and owner’s title insurance.
The homebuyer typically purchases the lender’s title insurance to protect the lender’s interest. The seller often buys for the owner’s title insurance to protect the buyer’s equity in the home.
Owner’s Title Insurance
As mentioned above, this insurance covers the interest of the person buying the home. The insurance will help protect a buyer in case someone states they have an open claim against the home they want to buy.
Examples of claims against a property:
- Tax lien
- Judgment lien
- prior recorded mortgage
- Unpaid work
There could be a contractor stating that they did work on the house and did not receive payment regarding unpaid work. There also could be a possible environmental lien or a notice of pending legal action.
Lender’s Title Insurance
Lender’s title insurance only protects the interest of the lender, not the current owner or the new homebuyer. If any claims against the property affect the homebuyer’s equity in the home, that will go through the owner’s title insurance. If anyone creates any claims involving the loan, this title insurance will take care of that.
The Florida state government sets the price for title insurance in Florida. The average cost is between $500 to $1500. Most homeowners purchase this insurance when they buy property in Florida because more mortgage companies require it.
Cost of Title Insurance in Florida
The title insurance cost in Florida typically follows a state-mandated formula. The price of your title insurance depends on whether you buy both title insurances or just one over the other.
Other factors that affect the Florida title insurance price:
- Is the home refinanced?
- Did you buy the house?
- Home’s purchase price
- Home loan amount
- Previous owner’s title insurance
To calculate the owner’s title insurance price, you will need to know the title insurance rate. The rate is $5.75 per thousand for the first $100,000.
Any amount higher than $100,000 but lower than $1,000,000 is $5.00 per every thousand. A one million to five million dollar policy costs $2.50 per every $1,000.
Title Search Fees
It is essential to know that you will most likely need to pay for the title search fees. This fee can cost around $100, depending on the title search company.
Title insurance premiums are not a monthly cost; you will need to pay this all at once. Where you live in Florida also plays a huge factor in who needs to pay for this title insurance.
For example, if the property is within Sarasota County, Miami Dade County, Broward County, or Collier County, the buyer pays for the title insurance. In all of the other counties, the seller pays for the insurance.
Who Picks the Title Insurance Company?
In Florida, your lender must approve of the title insurance agency you choose. Make sure to review with your lender before you pick any title insurance company. If you do not, you will waste money because you will need to go with a different company.
Alternatives to Buying Florida Title Insurance
If you do not want to go through the traditional way of selling your home, you have the option to sell to an iBuyer. When you sell your house the conventional way, you will have to pay many fees out of pocket before you even close on the purchase.
What Is an iBuyer?
An iBuyer, also known as an Instant Buyer, is a company that uses artificial intelligence (AI) to generate the value of your home. This AI uses data from your property and other mathematical algorithms to create an automated instant all-cash offer on your home.
Several different iBuyer companies are more local to your area, and there are some national iBuyers. It is best to contact several iBuyers, so you have a better idea of who has the best terms and offers.
How Does an iBuyer Work?
The goal of an iBuyer is to take away the anxiety of selling your home and simplify the entire home buying and home selling process. After you input some information, you will hear back from an iBuyer.
They will most likely have a few questions about the home before they move forward with the offer. The best part is, you can do this all from the comfort of your phone, and you can sign your papers online!
iBuyer Process
You will need to follow a few steps before you can close on your home sale. If you follow the steps timely, you can close within a few days!
Request an Offer
Once you locate an iBuyer that you want to work with, you will need to input your personal contact information and information about the home.
If your home meets the criteria, the iBuyer will send you a quote within 48 hours. At this point, they will most likely call you about additional information if needed.
Review the Offer
Most iBuyers give you about five days or so to make your decision. The offer they give you will break down any fees or closing costs and your expected net proceeds.
If you have a few iBuyers in mind, this would be the best time to request different quotes so you can compare and see which of the offers best suit you.
Accept the Offer
If you are happy with the offer, you can reach out to the iBuyer online or by phone to let them know that you accept the offer. The iBuyer will then need to send someone to inspect the home.
The purpose of the inspection is to ensure that your home matches what you put on the application. If there are any repairs needed, they will let you know right away.
You won’t have to worry about paying out of pocket for these repairs. You won’t even have to worry about waiting for them to complete the repairs before you close! The iBuyer will deduct the repairs from your net proceeds, and they will take care of the repairs when you move out.
Choose Your Closing Date
With the repairs out of the way, it is time to pick your closing date. As mentioned earlier, you can close within a couple of days, or you can close within a few weeks. The choice is yours.
Most iBuyers allow you up to two months to close and move out. Once you pick your closing day, you get to move on to your next adventure!
Why Choose an iBuyer?
If you want a quicker way to sell your home, you should go through an iBuyer. For example, let’s say that you were recently offered a dream job in another city and you need to move within the next month. You definitely won’t have enough time to deal with the lengthy process of selling your home with a real estate agent.
You may not even have enough time to improve or renovate your home. Not only will you have to deal with the old mortgage, but you will also have to deal with finding a new home in the new city.
When you go through an iBuyer, you no longer have to deal with selling your home the traditional way. You have the opportunity to close within weeks and move on to your new home. No more worrying about two mortgages!
Sell Your Home Today!
If you want to avoid the long, drawn-out process of selling a home, you have the option to sell to an iBuyer. Not only is this process simpler, but it is also a faster way to sell your home.
The best part is, the iBuyer takes care of the entire home selling and buying process on your behalf. You now no longer need to worry about how much title insurance is in Florida. If you are ready to learn more about selling your home, submit your address now!
Are you considering buying a home in Florida and wondering if you need title insurance? The truth is that title insurance is not legally required in Florida. However, your lender may require it if you are taking out a mortgage. If you’re buying your home in cash, there’s no requirement for title insurance, but it’s still a good idea if you want to protect yourself from financial loss due to accidentally purchasing a property with a ‘dirty’ title.
What Is a Dirty Title?
A dirty title on a home is one where the home has liens and back taxes or a conflicting will or ownership dispute. Now, you may think that the previous owners would be responsible for such things, but that’s not how it works. When you purchase a home, you are buying everything that comes with the home, including the home’s history. If there’s been a lien put on it by a contractor or government entity, you’re responsible for those charges if the home is in your name.
Can a Home Be Sold with a Dirty Title?
A home can be sold with a dirty title. However, lenders won’t finance a home with a dirty title due to the risk of financial loss. As a buyer, you can purchase the home in cash and assume all risks associated with the purchase, including liens, back taxes, ownership disputes and property disputes, but this is typically a terrible idea.
Homes Should Have a Clean Title Before Ownership Is Transferred
Prior to the sale of any home, a title company should be employed to do a complete title search to look for liens, ownership disputes and other problems with the title. The home should not be sold until all disputes are cleared and the title is determined to be clean. This process can take anywhere from 10 to 14 days. However, if extensive problems are found, it can take longer.
If the Title Search Is Clean, Is Title Insurance Necessary?
Yes, because there could be unrecorded problems with the title that could come up months or years later. For example, let’s say the previous owners didn’t pay their property taxes in the year that you purchased the home. The state revenue office may not have gotten around to filing the paperwork on the tax lien at the time you purchased the home, but because you now own the home, you are responsible for the back taxes.
The Basics of Title Insurance
If you don’t want the shock of hidden fees on the house you just purchased, it’s a good idea to get title insurance, which involves paying a one-time fee that protects the buyer or mortgage holder as long as they have an interest in the home. The one-time premium is typically based on the home’s value at the time of the purchase. Title insurance helps pay for:
- Problems with the home’s documents
- Recording and indexing mistakes
- Fraud and forgeries in regards to the home
- Problems with heirs (missing, unknown or undisclosed)
- Unpaid taxes
- Legal judgments against the home
- Mortgages that were not released
Two Types of Title Insurance
It’s important to understand that there are two types of title insurance. The first protects the lender. The second protects the homeowner. Lenders and financial institutions will require the purchase of title insurance that protects them, not the buyer of the home, and it’s important to understand the difference between the two so that you, as the purchaser of the home, are fully protected.
- Lender’s Title Insurance – Lender’s title insurance is required by financial institutions so that their investment is protected, and they often require the new homeowner to purchase this type of protection. Unfortunately, this does not protect the new owner. It only protects the financial institution.
- Buyer’s Title Insurance – Buyer’s title insurance protects the new owner against defects on the title of the home. This type of policy helps pay for issues that arise with the title or deed up to the policy’s preset amounts.
To learn more about insurance and to get a quote, give us a call at 813-689-8878.