Title insurance protects the buyer, the seller, and the lender, having an interest in the property, from loss. The title insurance company assumes certain risks that would otherwise fall on the buyer, the seller, or the lender. They make sure that the seller may sell the property and the buyer can purchase the property. Without a title policy, the parties involved would risk litigating potential title defects later uncovered.
A typical residential closing usually involves an owner’s title insurance policy and a buyer’s policy. The owner’s policy protects the buyer from title defects and the buyer’s policy protects the lender. The buyer and seller typically pay for their respective policies.
Most real estate attorneys in the Chicago Metropolitan area are also agents for various title companies. When selling your property, they research the ownership and uncover possible title defects in the property being sold. The title company pays the closing attorney a fee for the title services they perform and, in turn, most closing attorneys reduce the fee they would otherwise charge their clients. In the Chicago area, a real estate attorney typically charges a flat fee (usually $200-$450) to represent a seller.
Of course, there are always exceptions. Instead of being happy with receiving a title company fee and a nominal flat fee (seller $200-$450, buyer $450-$650), some attorneys charge by the hour, no matter what. I clearly remember representing an heir in a probate matter. The attorney handling the probate matter also handled real estate transactions. Instead of charging the decedent’s estate a flat, nominal fee, which any real estate attorney would do, this attorney decided to charge the estate for 8 hours of his time. When I asked why he wasn’t charging a customary, flat fee, he replied, “well, the personal representative didn’t complain.” After asking if he told the personal representative that he could have hired a real estate attorney for $350 to do the same job he charged 8 hours for, he quickly ended the conversation with me.
Skip the Chicago area attorneys charging an hourly fee for your real estate transaction.