Hands On The Heartland
Checking The Pulse Of The Kansas City Real Estate Market

If you’ve purchased a Kansas City home, you were probably aware that the home transaction included title insurance. But many Kansas City home sellers and buyers vaguely understand it’s importance, how much it costs and who pays for it. Title insurance is a one-time fee paid at the real estate closing and the coverage lasts as long as the purchaser owns the home. Live there 20 years and the title policy is still guaranteed — assuming you don’t refinance the home in the mean time. There would be a new policy issued by a new (or possibly the same) title company if refinancing. In Kansas City, home seller’s pay for title insurance on an adjustable scale based on the sales price of the home. Buyers who are taking out a loan on the home usually pay an additional fee to have the lender covered on the title policy – that fee is usually right around $200. To give you an example on the seller’s side of the transaction, one Kansas City title company is currently charging sellers around  $300 for a $100,000 home and $400 for a $200,000 home.

Why does a Kansas City home seller need to provide title insurance? Because any sane buyer isn’t going to purchase a property that could have a current claim against it – or the dreaded hidden defects or future claims that can rear their head. Think about what could happen if long lost cousin Billy suddenly shows up with a valid interest in a property you inherited and that’s since been sold. The potential possibilities for claims, lawsuits, liens, judgments and other defects are limitless really. It’s such an important matter that long ago my Kansas City Regional Association of Realtors included a title insurance clause in the base real estate sale contract.

There are several large title companies in the Kansas City area and many smaller ones too. The prices charged do vary but generally are close and within $100 for any given price range. So what happens if the title company messes up and there IS some future claim the title company should have known about or has overlooked? Most title policies guarantee the title company will defend you free of charge and ultimately cover you against any losses resulting from settlements involving the claim. There are caps on the amount of losses a title insurance will pay and you can ask your title company that question if you have any concerns. Title insurance losses occur infrequently but when they do they can have devastating consequences for owners without title insurance.

Posted by Jason A. Brown

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