Title insurance costs in Michigan range from 0.5% to 1% of your home sale price. While it may seem huge, it’s a small price to pay compared to the $106,000 that buyers lost on average in title fraud in 2023.
However, Y-O-Y, there’s been a 20% drop in fraud, as many home buyers are opting for title insurance. Your new home in the Wolverine State is a major financial investment; protect it with a title insurance policy to ensure you don’t lose thousands of dollars.
What Is Title Insurance in Real Estate?
Title insurance is a policy that protects the interests of both the buyer and the mortgage lender from issues related to a defective property title. Some of these issue include:
- Property border disputes
- Encroachments
- Easements
- Forged documents
- Third-party claims
- Errors in recorded documents
- Incorrect property deed
Title Insurance Cost in Michigan
Title policies in Michigan usually cost about 0.5% to 1.0% of the home’s sale price same as title insurance costs in the USA. It is usually included in the closing costs. You will either get a cumulative quote or an itemized breakdown of the policy.
It is not mandatory to have owner’s title insurance, but it is highly recommended to secure your property.
| Housing Price | Title Insurance Cost (Per thousand) |
| Up to $100,000 of liability written | $4.60 |
| From $100,000 to $1 million | $3.90 |
| Over $1 million to and up to $5 million | $3.25 |
| Over $5 million and up to $10 million | $2.25 |
| Over $10 million | $1.65 |
What Does Title Insurance Cover in Michigan?
A typical policy quote in Michigan will include the following title fees:
| Coverage | Meaning | Fees |
| Title Search | Confirms details about the property’s legal ownership. | $100 to $250 |
| Title Settlement | Helps in the transfer of ownership from the seller to the buyer. | $500 to $800 |
| Deed Preparation | Helps draft deeds and legal documents for the transaction. | $250 to $350 |
| Land Survey | Determines the land boundaries and draws legal property lines. | $200 to $800 |
| Real Estate Attorneys | Helps with legal documentation and advises on real estate transactions. | $100 to $700 per hour |
| Escrow | A neutral third party that holds and disburses all funds and documents in a deal. | $500 to $800 |
Types of Policies and Costs in Michigan
There are two types: the owner’s title policy and the lender’s title policy.
1. Owner’s Title Insurance Policy
In Michigan, this policy is usually available in 2 forms: standard and enhanced.
- Standard Policy: This policy generally protects the new owner from third-party claims like encroachments, undisclosed heirs, liens, etc.
- Enhanced Policy: This policy includes all the standard coverages and certain additional perks. These are protection from unrecorded liens (estate tax liens), building permit violations, post-policy forgery, etc.
If the median home price is $237,500, the owner’s title policy would cost you around $1,557 in Michigan. It’s a one-time fee, and the coverage lasts as long as you or your heirs own the property.
» Want To Know the Best Time To Buy a House in Michigan: Here’s a step-by-step guide.
2. Lender’s Title Insurance Policy
It protects the mortgage lender’s investment from any property-related issues like undisclosed heirs, forgery, and liens.
The policy cost depends on the loan issued. The average mortgage in Michigan is $222,407, for which the lender’s policy is $1,477. In addition, the accountability of the title insurer decreases as the loan is paid off.
A lender’s title insurance policy is mandatory, and its period is equal to the loan term. In the Wolverine State, it is common for buyers to handle the overall costs. However, sometimes, sellers might agree to cover a few of these expenses.
How to Save on Title Insurance Costs in Michigan
Most of the companies in Michigan have similar premiums, but there are some ways to save on costs:
- Bundle Plan: You can buy the owner and lender policies from the same company and avail of a discount.
- Shop Around: You can look for other companies if the premiums are unregulated in the Wolverine State. Go through all the company reviews and compare quotes to finalize one.
- Negotiate Closing Costs: If the seller is motivated to sell the property, they may agree to cover the costs for the title insurance within the closing costs.
» How Much Are Closing Costs in Michigan: Here is how much you have to pay in the Wolverine State.
Other Alternatives
While title insurance is the most beneficial option for your new home in Michigan, here are some of the alternatives you can consider:
- Attorney Opinion Letters (AOLs): These letters are personalized and provided by attorneys as an alternative to title insurance. AOLs may cost you a lower upfront fee; however, they can introduce more risk to lenders and consumers.
- Closing Platforms: Such platforms eliminate the need for traditional title insurance as they potentially reduce costs.
Bottom Line
Title insurance is a necessary investment to protect your new home. Homeowners have lost almost $100k in fraud. You can save your money by paying 0.5% to 1% of your home sale price as title policy fees.
If you are looking for title companies in Michigan, Houzeo can help you. On our platform, you can easily find one and book an appointment with the best title company nearby.
» Need More Clarity? Read these exclusive Houzeo reviews and learn why the platform is the best in America’s competitive housing market.
Frequently Asked Questions
What are title fees?
Title fees are a part of closing costs that include title searches, attorney and notary services, settlement fees, etc.
How much does title insurance cost in Michigan?
The title insurance will cost around 0.5% to 1.0% of the home's purchase price in Michigan.
How much is owner's title insurance in Michigan?
Title insurance rates in Michigan typically start at $4.60 per thousand for the first $100,000 of the property value.
Who pays the title insurance cost in Michigan?
In Michigan, sellers usually pay for title insurance, but this can change depending on the county.
