Buying in Bloomfield Hills or anywhere in Oakland County comes with a big question: how do you protect your ownership once you close? Title insurance can feel technical, but it is one of the simplest ways to reduce risk on one of your largest investments. If you want a clear, local explanation of what it covers, how much it costs, who pays, and what to expect at closing, you are in the right place. By the end of this guide, you will know how title insurance works in Michigan and how to navigate it with confidence. Let’s dive in.
What title insurance covers
Title insurance is a one-time premium that protects you against losses from defects in a property’s title that existed before your policy date. If a covered issue surfaces later, the policy can pay for legal defense and, if needed, indemnify you up to the policy limits. It is different from other insurance because it looks backward at past risks tied to ownership records.
Common covered defects include forged or invalid deeds, undisclosed or missing heirs, mistakes in public records, unknown liens, and errors in recorded documents. Fraudulent conveyances can also be covered, subject to policy terms and any exceptions. Coverage is limited by the policy language, so review the commitment and final policy carefully.
There are standard exclusions found in most policies. These usually include matters that occur after the policy date, issues with the physical condition of the property, visible encroachments or easements unless specifically insured, certain tenant rights, and governmental matters like zoning or eminent domain unless endorsed. Understanding what is not covered is as important as knowing what is.
Owner vs lender policies
There are two distinct title policies in most Michigan home purchases. Each protects a different party and a different interest in the property. Knowing the difference helps you decide what you need at closing.
Lender’s policy
A lender’s policy is required by your mortgage lender as a condition of the loan. It protects the lender’s lien up to the loan amount, and the coverage typically declines as you pay down the mortgage. Buyers often pay for this policy, although who pays can be negotiated in your purchase agreement.
Owner’s policy
An owner’s policy protects your ownership interest and equity, usually up to the purchase price. It is optional from the lender’s point of view, but it is strongly recommended because the lender’s policy does not protect you as the owner. You pay the premium once at closing, and coverage generally lasts as long as you or your heirs hold an interest in the property.
Why this difference matters
If you only have a lender’s policy and a defect challenges your ownership later, the lender is protected but you are not. That can mean out-of-pocket legal defense and potential losses. Buying an owner’s policy at closing is simpler and more protective than trying to add it after the fact. You can also discuss enhanced coverage or endorsements if the property is complex or higher value.
How title work happens locally
In Michigan, title searches and closings are typically handled by title companies, closing or settlement agents, or real estate attorneys. In Oakland County, title companies frequently issue title commitments, coordinate escrow and payoff, and handle recording and policy issuance. Local practice often relies on the title company to manage the full closing process.
For Oakland County records, the title search pulls from the Register of Deeds for recorded deeds, mortgages, and easements. It also checks county tax offices for property tax status and delinquencies, the circuit court for judgments, and municipal offices for local assessments. The search looks for chain-of-title issues, mechanics’ liens, covenants or restrictions, and any easements that affect the property.
Before closing, the title company issues a title commitment. Schedule A outlines the basics like the parties, coverage amounts, and legal description. Schedule B lists exceptions and requirements that must be cleared to deliver insurable title. Plan time for clearing issues because older liens, missing releases, probate questions, or survey discrepancies can take days or even weeks.
Bloomfield Hills considerations
Many Bloomfield Hills homes sit on established or older suburban lots. That can mean unrecorded easements, ambiguous legal descriptions, or older mortgages that require careful payoff and release documentation. If the property is part of a condominium or a homeowner association, budget time for HOA documents, estoppel letters, and any condominium or planned unit development endorsements.
Always check property taxes and municipal assessments early. Unpaid taxes or special assessments are a common reason closings get delayed and can be addressed sooner with proactive coordination.
Costs and who pays
Title insurance premiums in Michigan are paid once at closing. You may have two premiums if you purchase both a lender’s policy and an owner’s policy. Expect separate line items for title search and exam fees, closing or settlement fees, recording charges, document preparation, and any endorsements you elect to add.
Premiums are influenced by the purchase price and loan amount, the type of policy, and endorsements selected. Property complexity also matters. Homes with long chains of title, multiple vesting changes, or several payoffs can require additional search and clearing work. Insurers file rates with the state, and pricing can vary by company and policy choices.
As a benchmark, national consumer guidance describes title premiums as a relatively small percentage of the purchase price. In Michigan, exact premiums vary and are best confirmed with an itemized estimate from a local title company. Plan for fixed fees on top of the premium, including county recording costs and settlement fees that can add several hundred dollars depending on the transaction.
Who typically pays in Michigan
There is no single statewide rule for who pays. The purchase agreement controls, and customs can vary by region and even by transaction. Common approaches include the buyer paying for the lender’s policy and a negotiated arrangement for the owner’s policy. Some sellers offer to pay for the owner’s policy as part of the deal. Clarify this upfront in your contract.
Your Bloomfield Hills closing checklist
Use this simple checklist to stay on track from commitment to closing:
- Review the title commitment promptly. Confirm names, legal description, and coverage on Schedule A. Study Schedule B for exceptions and requirements.
- Ask the title agent to explain each requirement and timeline. Request written steps for clearing liens, judgments, or missing releases.
- Confirm payoff amounts and wiring instructions early. Coordinate with your lender and the title company to avoid last-minute delays.
- Verify property tax status and any municipal assessments. Address outstanding balances before closing.
- Consider a survey or a survey-related endorsement if you see boundary risks, fences near lot lines, or visible encroachments.
- If the property is in a condo or HOA, request the necessary documents, estoppel letters, and any applicable endorsements.
- Confirm who pays for which policy and fees in the purchase agreement. Make sure the closing disclosure reflects that agreement.
- Discuss endorsements that fit your property and risk tolerance. Enhanced coverage may be appropriate for complex or high-value homes.
What happens on closing day
On closing day, you will do a final review of the title commitment and closing disclosure or settlement statement. After funds are disbursed, the deed and mortgage are recorded with the county. The title company then issues the final policies.
The lender’s policy is often issued shortly after recording, while the owner’s policy may follow once post-closing steps are complete. Timelines can vary, but you should receive your policy documents for your records. Keep them in a secure place.
If a title issue appears later
If a covered title defect appears after closing, notify the title insurer right away. Your policy includes claim procedures and deadlines, and prompt notice helps protect your rights. Covered claims typically include the insurer’s duty to defend and to indemnify up to your policy limits.
Keep copies of your title commitment, final policy, and closing statement. Having the right documents ready can speed up claim handling. Your title company can guide you on how to file and what to expect.
How to choose a title company
You can shop for title insurance. Ask for quotes from multiple local companies, and compare itemized estimates for premiums, endorsements, and closing fees. Title insurance is a regulated product in Michigan, but prices can still vary based on coverage choices and services.
Look for experience with Oakland County recordings and municipal processes. Ask about claims handling, communication standards, and typical timelines. Your agent may recommend reputable local providers, but you have the right to compare and choose.
Smart questions to ask
- What exceptions are listed on Schedule B, and how will we clear them before closing?
- Which endorsements do you recommend for this property, and why?
- What are the total premiums and all closing-related fees in writing?
- Who is paying for the owner’s and lender’s policies, and is that reflected in the contract?
- When will the deed and mortgage be recorded, and when will final policies be delivered?
- How do I file a claim if a title issue arises later?
The bottom line for Oakland County buyers and sellers
Title insurance gives you peace of mind by protecting against past title defects. An owner’s policy safeguards your equity, while a lender’s policy protects your mortgage holder. In Bloomfield Hills and across Oakland County, the title company will coordinate the search, commitment, closing, recording, and final policy issuance.
Your best move is to review the commitment early, ask clear questions, and confirm who pays for which items in the purchase agreement. When you put these pieces in place, you arrive at the closing table with confidence and clarity.
If you want a second set of eyes on your plan or need local guidance tailored to your property, connect with Kyle Matta. You will get responsive, expert support grounded in Oakland County experience.
FAQs
What is title insurance in Michigan and why buy it?
- It is a one-time policy that protects against covered defects in the property’s title and can pay legal defense and losses, which helps safeguard your investment.
What is the difference between an owner’s and a lender’s policy?
- The owner’s policy protects your ownership and equity, while the lender’s policy protects the lender’s lien; they insure different parties and amounts.
How much does title insurance cost in Oakland County?
- Premiums vary by price, loan amount, endorsements, and provider, plus fixed closing and recording fees; request itemized quotes for accurate numbers.
Who typically pays for title insurance in Bloomfield Hills?
- It is negotiable and set by the purchase agreement; buyers often pay the lender’s policy, and the owner’s policy is commonly negotiated between parties.
What should I look for in the title commitment?
- Confirm names and legal description on Schedule A, and review Schedule B exceptions and requirements so you know what must be cleared before closing.
How long does coverage last for owner and lender policies?
- The owner’s policy lasts as long as you or your heirs have an interest in the property, and the lender’s policy lasts until the mortgage is repaid.
