So, the Seller will go and buy Title Insurance to back that claim up.
On your side, however, your Lender may require Title Insurance to protect the Loan, and they will require that You pay for it.
If there were a maximum claim - the Seller or someone before them sold it to someone else - the Seller's Title Insurance would pay you, and the TI you bought for the Lender would pay them.
Now, if the Seller isn't offering a Warranty Deed, then you migh want to buy it for yourself, mightn't you?
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The buyer's policy is generally a bit cheaper, since they have just run the same policy research for the seller's policy.
It's actually a good policy to have, for both of you. If there is some sort of problem with your title (and remember, this is Cook County, we just emerged from Torrens Certificates not too long ago), the title company is the one who's at risk.
Usually seller is reimbursing the buyer for the cost of Owner's Policy. This policy protects buyer's deed.
There also are other fees involved. If the property is financed - the buyer is responsible for Lender's Policy fee. This is title insurance that protects buyer's lender.
In Lincolnshire there also is a $3 per $1000 purchase price real estate transfer tax that is paid by buyer, but depending on the situation you can try to negotiate with the seller and have them pay a part of this tax or all of it.
Please contact me directly should you need more details.
Express RE Group, Inc.
847 630 6843