Are you thinking of purchasing a property with the intent to re-sell the property within two years? If so, consider purchasing an Interim Binder to SAVE yourself some money.
What is the purpose of the interim binder? It allows a purchaser of real property to re-sell the same property and have a new policy of title insurance at a fraction of the cost. What is the cost of the Interim binder? The original SELLER pays the basic policy fee. The BUYER pays an additional 10% of the seller''s fee schedule insurance rate for the Interim Binder.
For example, The original owner sells a property for $100,000. You, knowing that this is going to be short term investment for the buyer, request an INTERIM BINDER before the close of escrow. The original owner (seller) pays a title policy fee of $620.00, the normal charge. Benefits of the Interim Binder The buyer, pays $62 or 10% of the basic rate for the INTERIM BINDER. One year and 11 months later, you find a buyer for this property which is now worth $120,000. The property goes into Escrow. The buyer becomes the seller. Now the seller can reap the benefits of the INTERIM BINDER which was purchased when the seller bought the property. Using the Interim Binder Saves Money.
The seller pays only the increase insurance amount necessary to cover the increased price of the property. Title fee on $120,000 liability $680 Less premium paid on $100,000 $620 Sellers cost for the new policy $60 The money saving advantage of using the Interim Binder is evident! How long is it good for? Two years! What happens if I keep the property longer than 2 years? In that case a policy of title insurance is automatically issued to you. However, the binder may be extended for another two years at an additional 10 percent. It all adds up, for less The total cost for an owner''s policy of title insurance is $60 plus the 10% or $62 the seller paid up front when the seller bought the property. The policy is a total of $122 compared to $544, the normal short term rate fee for a home valued at $120,000. The seller saved $422!