Title insurance 101 for new agents

If you're a newer agent, here's the short list of things buyers will ask about title insurance — and the plain-English answers you should have ready before you ever sit down at a kitchen table.

1. What does title insurance actually do? It protects the buyer (and separately, the lender) from financial loss caused by problems with the property's title that existed BEFORE they bought it but weren't caught during the title search. Forged signatures in the chain of title, unknown heirs, recording errors, fraud — those are the classic claims. Unlike car or homeowners insurance, you don't pay monthly. It's a one-time premium at closing and the owner's policy lasts as long as the buyer or their heirs own the home.

2. Who pays for it? In Los Angeles County the customary split is: seller pays for the owner's policy, buyer pays for the lender's policy. Customary, not required. Everything is negotiable in the purchase agreement, and in tight markets we see buyers offer to cover both to sweeten an offer.

3. What's a preliminary title report? The 'prelim' is the snapshot of the property's current title status — who owns it, what's recorded against it (liens, easements, CC&Rs, judgments), and what has to be cleared before a policy can issue. It is NOT a policy and NOT a guarantee — it's a roadmap of what the title company found and what the parties need to resolve. You should read every prelim with your client and call your title rep about anything you don't understand.

4. What's vesting and why does the buyer have to choose? Vesting is how title is held — sole ownership, joint tenancy, community property, tenants in common, a trust, an LLC. The choice has real estate-planning and tax consequences and you are not licensed to advise on it. Your job is to flag it early, tell the buyer to talk to their CPA or attorney, and make sure the chosen vesting is reflected on the grant deed at signing.

5. What's a Statement of Information and why is the buyer being asked for personal details? The SI lets the title company tell your buyer apart from every other person in California with a similar name. Without it, every matching lien, judgment, or bankruptcy on someone with the same name shows up as an exception to coverage — and the lender will not fund. It's confidential, it's required, and the faster the buyer returns it, the faster you close.

6. What can delay closing once the prelim is out? In our experience: unresolved liens (mechanic's, tax, HOA), heirship issues from a recent death in title, name variations that need an SI, and last-minute lender conditions tied to title exceptions. None of these are mysterious — they're just things to address early. Read the prelim the day it lands, and if anything looks off, call us. We'd rather field a question on day one than scramble on day 29.

If you have a transaction in the South Bay or Westside LA and want a title rep who will actually walk a buyer through this on the phone — that's literally the job. Reach out anytime.