To put things into perspective, here’s an example that illustrates how a title binder might save an investor money.Īn investor buys a home with the intent to fix it up and sell it within one year. How? Because the title binder allows the real estate buyer to resell the same property and have a policy of title issued to the new buyer at fraction of the cost. If you purchase a title binder up front, you may save hundreds of dollars in title fees in the future. This company is responsible for examining public records, preparing title abstracts, selling title insurance and issuing the insurance after conducting a title search on the property. There is a one-time premium that is paid to the title insurance company. The purpose of title insurance is to ensure the buyer or lender for the property against unknown defects in the title. Whenever you buy or sell a home, you incur costs to have the title searched. But, if you plan to sell the home in less than two years, the title binder will serve as a costing saving tool to you.
If you plan on staying in your home for more than two years, have no intention to flip your home or don’t foresee plans for frequent relocation, you most likely do not need to worry about a title binder. This is a great question! The easy answer is to ask yourself the following questions: “How long do I plan on keeping this property?” Regardless of how it’s referenced, it is a commitment to issue a title policy. A title binder is often referred to as an interim binder.A title binder is an important concept you should be familiar with so that you can save money if plan on selling your home within two years after purchasing it.Why? Because a title binder is NOT an actual binder where you would house notes related to buying or selling a home. This topic is often a confusing topic for home buyers and sellers alike, and it’s no surprise.
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