Do you know what a Title Binder is?

By
Real Estate Agent with Berkshire Hathaway HomeServices 01238708

Do you know what a Title Binder is?

Today more than ever people are looking to save money. The Title Binder is a way for a Potential individual who knows that they will sell the property within 1-3 years to save some money.

There are individuals who buy a dilapidated home and fix it up with the intent on re-selling the home within one to three years. These developers, individuals who intend on reselling for a small profit have the most to gain.

The Title Binder allows a CLTA Standard Coverage Owners Policy of title insurance to buy at a fraction of the cost. Binders are valid for 2 years and could be extended another year.

The Objective behind the binder is that when you initially purchase the property you can pay and additions 20% of the CLTA Standard Coverage Owners rate on title insurance to get the Title Binder.

Therefore my advice is when you buy the property in your negotiation try to ask the seller to pick up this additional 20% cost on the Title Insurance, if you cannot than you should purchase the difference. By you partly paying the difference between the initial cost and the actual price of the policy you will reap a great financial benefit when you are selling the home.

You will only have to pay on the difference of the Purchase vs. Sales Price; any Title Sales Representative will confirm what I just suggested. In other words let's say you bought the house for $500,000.00 and after fixing it up and living in it for a few years you end up selling for $850, 0000.00 you will pay Title insurance on the difference which is $350,000.00 rather than paying Title Insurance on the new Sales Price of $850,000.00.

The beauty of a Title Binder is that it does not matter whether you are buying a home in Los Angels  in the city or if you are buying an Ocean View home in Malibu, you can take advantage of the Title Binder's benefit.

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 (USA) or email me at  homes@endrebarath.com  or visit one of my websites at    http://www.endrebarath.com  Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations

 

Comments (11)

David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

Doesn't work today. Buyer may still be under water.

May 24, 2011 12:46 PM
Juli Vosmik
Dominion Fine Properties - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Great, advice, Endre - in an increased value sale.  Let's hope we return to that soon!!!

May 24, 2011 12:49 PM
Ann Bellamy
Hard money lending for investors in NH and MA - Tyngsboro, MA

Is this California only?  CLTA is California Land Title I think?

May 24, 2011 12:56 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

David, maybe in your area it does not work. Keep in mind a living example the Seller bought a vacant lot for around $250,000. about two years ago in the Hollywood Hills and built a New Construction home and is selling it for $6,500,000.00. So again maybe you do not have vacant lots or heavy fixers in your market area hence your comment.

May 24, 2011 12:57 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Juli depends on each situation, hope your area will get back soon too:)

May 24, 2011 12:58 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Ann good point, I can only speak for California, but it is worth checking with your Title Representatives this might be more universal.

May 24, 2011 12:59 PM
Ken Barker RealtorĀ® GRI, E-Pro Certified
Dilbeck Real Estate - Burbank, CA

Endre - Yes it is a Calif Land Title coverage. That is why it is hyperlocal. I am sure some of the other states will apply though.
Are you selling it for $6,500K?

May 24, 2011 05:34 PM
Paddy Deighan MBA JD PhD
federalfinanciallawgroup.com - Vail, CO
Paddy Deighan J.D. Ph.D

very useful blog...few people have ever mentioned this

May 28, 2011 08:24 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Ken I am sure there are other states that have this as well, hence my suggestion to get in touch with their Title Representatives.

Paddy thank you for your comment.

May 28, 2011 05:50 PM
Scott Hoen
HollywoodTitleCompany.com - Carson City, NV
COO, Monarch Title Company 714-270-9607

You have made some great title insurance related posts!

Jul 03, 2011 05:50 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Scott, I appreciate the complement coming from a Title person means a lot:)

Jul 03, 2011 01:20 PM