Buying or selling in Westborough comes with a lot of paperwork, and title insurance is one item that raises questions fast. You might wonder what it actually covers, whether you really need it, and how much it will add to your closing costs. You are not alone. In this guide, you will learn what title insurance does, what it does not, typical Massachusetts costs, and how to decide what you need before closing. Let’s dive in.
Title insurance basics
Lender’s vs. owner’s policies
Most lenders require lender’s title insurance. It protects the lender’s interest in your property up to the loan amount against covered title defects that existed before closing. It does not protect your equity.
An owner’s title insurance policy is optional but strongly recommended. It protects your financial interest, usually up to the purchase price, if a covered title problem surfaces after closing. You pay a one-time premium at closing, and coverage lasts as long as you or your heirs have an interest in the property.
What title insurance covers
Common covered risks
Standard policies generally cover:
- Recorded but undisclosed liens or mortgages.
- Errors in public records and defective or missing signatures.
- Forged or improper documents in the chain of title.
- Undisclosed or missing heirs who later claim ownership.
- Certain access issues and unmarketable title discovered after closing.
If a covered claim arises, the insurer typically pays legal defense costs and reimburses losses up to the policy limit.
What is not covered
Policies also include exclusions and exceptions. Common items not covered include:
- Zoning or building code violations and permit issues.
- Boundary or encroachment disputes not shown in public records unless a survey endorsement applies.
- Environmental hazards and the physical condition of the property.
- Recorded easements and restrictions shown as exceptions in your policy.
- Matters created after the policy date.
Review the schedule of exceptions carefully so you understand what is carved out.
Useful endorsements in Massachusetts
Endorsements are add-ons that can fill gaps in coverage. In Massachusetts, older homes and shared features are common, so these endorsements often matter:
- Survey or plat endorsement to address certain boundary or survey issues.
- Access or driveway endorsements when access crosses another parcel.
- Condominium unit endorsements for condo purchases.
- Mechanics’ lien endorsement if recent work was done without releases.
- Zoning and land use endorsements when applicable.
Endorsements add cost but can be valuable when local conditions introduce risk.
Local issues in Westborough and MetroWest
In Westborough and the broader Cambridge–Newton–Framingham and Worcester areas, title work often surfaces a few recurring themes:
- Probate questions and unknown heirs tied to older New England properties.
- Municipal liens or unpaid local taxes that must be cleared before closing.
- Historic easements, rights of way, or recorded neighborhood covenants.
- Properties registered with the Massachusetts Land Court, which can provide higher certainty on some matters, though not all title risks are eliminated.
Flag these early, and make sure your purchase and sale agreement accounts for clearing defects before closing.
How much it costs in Massachusetts
One-time premiums and factors
You pay title insurance once at closing. The owner’s policy amount usually equals the purchase price. The lender’s policy equals the loan amount. Pricing depends on several factors:
- Purchase price and loan amount.
- Complexity of the title search and any issues to resolve.
- Which endorsements you add.
- Whether a survey is required.
- Recording and settlement fees that are separate from the premium.
Some companies offer combined pricing when issuing both policies together, and a reissue discount may apply if there is a recent owner’s policy on the same property.
Typical cost ranges
Exact rates vary by company and property. As a practical guide for many Massachusetts residential deals:
- Owner’s policy: often about 0.3% to 1.0% of the purchase price.
- Lender’s policy: often a fraction of a percent of the loan amount, for example roughly 0.2% to 0.5%.
These are estimates. Always request a written, itemized quote from your title or closing company.
Sample Westborough estimate
Here is an illustrative example to show scale, not a quote:
- Purchase price: $600,000; loan: $480,000.
- Owner’s policy at 0.5%: $3,000, paid once at closing.
- Lender’s policy at 0.3% of the loan: $1,440, typically required by the lender.
- Total title insurance premiums: about $4,440, plus any endorsements, recording fees, and settlement charges.
Your actual cost will depend on the title company, endorsements, and contract terms.
Who pays at closing
Custom varies by area and by negotiation. In many Massachusetts transactions, including MetroWest communities, it is common for the seller to pay for the owner’s policy as part of seller closing costs. Lenders typically require the buyer to pay for the lender’s policy. Always confirm who pays for which policy in your purchase and sale agreement.
Timeline from offer to closing
Offer accepted and purchase and sale agreement signed. This is when you confirm who pays for the owner’s policy and whether you plan to buy it. Ask for the seller’s deed and any existing title policy, which can sometimes help with a reissue discount.
Title search and commitment. Shortly after ratification, the title company searches public records and prepares a title commitment that lists conditions and exceptions. Review this with your agent or attorney.
Clear objections and choose endorsements. If the commitment shows defects, the seller typically clears them or you negotiate a fix. You decide on endorsements and whether a survey is needed.
Closing and policy issuance. The lender’s policy issues at funding. The owner’s policy issues after recording. Ask how the company covers the brief gap between the title search date and recording.
Buyer checklist
- Confirm local custom on who pays for the owner’s policy and what your contract requires.
- Request the seller’s deed and any existing owner’s policy to explore a possible reissue discount.
- Verify your lender’s requirements for the lender’s policy and endorsements.
- Review the title commitment and ask the title company to explain any exceptions.
- Consider MA-friendly endorsements such as survey/plat, mechanics’ lien, and condo unit coverage when applicable.
- Request a written, itemized title premium quote well before closing.
Seller checklist
- Provide your deed, mortgage payoff details, and any HOA or covenant documents to the closing agent early.
- If local custom has the seller paying for the owner’s policy, budget that cost into your net sheet.
- Address known liens or permits up front to avoid last-minute delays.
Final thoughts and next steps
Title insurance is a one-time purchase that protects you from costly surprises tied to past ownership. In Westborough and the broader MetroWest and Worcester markets, older properties and recorded easements are common, which makes careful policy selection important. The key is simple: clarify who pays, review the title commitment, choose smart endorsements, and get a written quote.
If you want help navigating options or coordinating with local title companies and closing attorneys, reach out to Adam Duffy. You will get clear guidance grounded in local experience so you can close with confidence.
FAQs
Is owner’s title insurance required in Massachusetts?
- No. Lenders require lender’s title insurance, but an owner’s policy is optional and recommended since it protects your equity and covers legal defense for covered claims.
What does a lender’s policy cover on a Westborough home?
- It protects the lender’s interest up to the loan amount against covered title defects that existed before closing; it does not protect your ownership or equity.
How do endorsements work for Massachusetts properties?
- Endorsements are optional add-ons, such as survey or condo endorsements, that extend coverage for specific risks common in MA; they cost extra and are selected before closing.
Who typically pays for an owner’s policy in MetroWest?
- Custom varies, but many Massachusetts deals have the seller paying for the owner’s policy; confirm the arrangement in your purchase and sale agreement.
Can I get a discount if the seller has a recent policy?
- Possibly. A reissue discount may apply when there is a recent owner’s policy on the same property; ask the title company for eligibility and documentation requirements.
