Buying a home in Pittsboro and hearing a lot about title insurance? If you are new to North Carolina closings, the terms, policies, and who pays for what can feel confusing. You want to protect your investment without buying coverage you do not need. In this guide, you will learn what title insurance actually covers, how owner and lender policies differ, what costs to expect in Chatham County, and how North Carolina’s attorney-closing process works. Let’s dive in.
Title insurance basics in North Carolina
Title insurance protects you from financial loss caused by problems with a property’s ownership history that existed before you closed. It is a one-time premium paid at closing and it covers past defects in title, not future property damage or wear and tear.
There are two policies in most financed purchases. A lender policy protects the lender’s mortgage interest up to the loan balance. An owner policy is optional but recommended, and it protects your ownership interest up to the purchase price.
What standard policies cover
- Errors in public records or recording mistakes
- Forged or fraudulent prior deeds or releases
- Undisclosed or missing heirs in a past transfer
- Improper releases related to marital status
- Prior liens or assessments that were not found in the search
- Improperly recorded easements or encumbrances
If a covered claim arises, the insurer typically provides legal defense and pays covered losses up to your policy amount.
What title insurance does not cover
Title insurance is not general property insurance. It usually does not cover:
- Zoning or building code compliance
- Physical issues like structural defects or environmental conditions
- Problems that arise after the policy date, unless tied to a preexisting title defect
- Rights not recorded in public records, unless added by endorsement
- Matters you already knew about or that are listed as exceptions in your policy
- Boundary or encroachment issues revealed by a current survey, unless endorsed
Owner vs. lender policies
A lender policy protects only the lender’s security interest. It does not protect your equity. If a defect jeopardizes ownership and you only have a lender policy, you could face legal bills or loss without coverage.
An owner policy protects your ownership interest up to the policy limit, which is usually the purchase price. Coverage is effective as of the date of closing and continues for as long as you or your heirs own the property, subject to policy terms and limits.
Policy limits and how they work
- Lender policy limit equals the outstanding loan balance and decreases as you pay the mortgage
- Owner policy limit is typically set at the purchase price and remains fixed once issued
Endorsements and enhanced options
Endorsements can extend protection to address common gaps. In North Carolina, buyers often ask about:
- Gap coverage between closing and recording
- Survey or boundary-related endorsements
- Access or restrictions coverage
Ask your closing attorney which endorsements are typical for Pittsboro and whether they make sense for your property type.
Costs and who pays in Pittsboro
Title insurance premiums are one-time charges that scale with the policy amount. The owner policy amount is usually the purchase price. The lender policy amount is usually the loan amount. North Carolina uses filed rate schedules, so premiums are generally consistent for a given insurer. You also pay separate title-related closing costs like search and exam fees, attorney fees, recording fees, and taxes where applicable. These are distinct from the title insurance premium.
In many North Carolina markets, it has been common for the seller to pay for the owner policy, while the buyer pays for the lender policy. That said, customs vary by county and by contract. In Chatham County, practice can shift with market conditions. Confirm who pays which fees in your offer and review the settlement statement carefully before closing.
To estimate your costs, ask your closing attorney for a preliminary title quote based on your purchase price and loan amount. If you are considering endorsements, request itemized pricing so you can weigh the value of each option.
How North Carolina attorney closings work
North Carolina uses an attorney-closing model. The closing attorney handles the title search, prepares the deed and closing documents, coordinates payoffs, prepares the settlement statement, and manages recording and disbursement.
Here is the typical buyer timeline in Pittsboro and greater Chatham County:
- After contract, the attorney orders the title search and title commitments for owner and lender policies.
- The attorney examines the records: chain of title, liens, judgments, taxes, easements, plats, covenants, and subdivision documents. The title commitment lists exceptions and requirements.
- Any defects or requirements are addressed. Unreleased liens are resolved, taxes are prorated and paid, and necessary releases are obtained, or the issues are shown as exceptions.
- At closing, you and the seller sign documents with the attorney. You bring funds by wire or certified funds as instructed. The attorney oversees execution and funds.
- After closing, the attorney records the deed and deed of trust with the Chatham County Register of Deeds and then coordinates issuance of final title policies.
- You receive the recorded deed and your owner policy after recording. Timing can vary based on local recording and processing.
Local attorneys understand Chatham County’s records, plats, and common easement language. That local insight helps translate the title commitment into clear steps so you can close with confidence.
Pittsboro and Chatham County title considerations
Chatham County includes a mix of rural tracts, small subdivisions, and growing neighborhoods. Several issues come up more often in the area.
Rural access and easements
Some properties rely on shared drives or historic paths. You may see unrecorded or older rights-of-way. A current survey, a review of recorded plats, and discussion of endorsements can help clarify access and maintenance agreements.
Septic and well systems
Septic and well functionality is not covered by title insurance. Title work may reference recorded permits, easements for lines, or covenants that affect where systems can go. Order inspections and verify local permits with the appropriate offices.
Boundary and survey matters
Standard owner policies include standard exceptions for boundary disputes, encroachments, and other matters a survey would reveal. If boundaries are a concern, get a current survey and talk with your attorney about survey-related endorsements.
Conservation easements and development limits
Conservation easements and restrictive covenants are common. These appear in the chain of title and will be listed as exceptions on the policy. They can permanently limit development and run with the land.
Zoning, annexation, and floodplain
Title insurance does not insure zoning or building code compliance. Confirm current zoning, permitted uses, and any floodplain status with local planning and floodplain officials as part of your due diligence.
Liens, HOAs, and historic issues
Older properties can have unreleased mortgages, tax liens, or judgments. HOA declarations and assessments are recorded and will remain enforceable. Family transfers or older deeds can create gaps in the chain of title if releases are missing. Your attorney will work to clear valid issues before closing or note them as exceptions.
Buyer checklist for Pittsboro closings
Early in the contract
- Confirm in writing who pays for the owner policy and the lender policy
- Choose a closing attorney promptly so the title search can begin
- Request a sample title commitment and preliminary closing costs, including endorsements
Before closing
- Review the title commitment with your attorney and ask how to handle each exception
- Order a current survey if boundaries, fences, or driveways concern you
- Discuss common endorsements and whether they fit your property
- Schedule inspections for septic, well, and structure as needed
At closing
- Confirm the settlement statement lists title premiums and who pays each one
- Bring funds as instructed and sign with your attorney present
- Ask when to expect your recorded deed and owner policy
After closing
- Store your recorded deed and owner policy safely
- Keep contact info for your attorney and the title insurer for any future questions
Bottom line for Pittsboro buyers
A lender policy protects the bank. An owner policy protects you. In a county with rural tracts, shared access, and active conservation, investing in an owner policy is a simple way to protect your equity and avoid costly surprises.
If you are weighing endorsements, costs, or who pays what under your contract, reach out for local guidance. Our team can help you coordinate with a closing attorney, review your timeline, and make sure you are protected from contract to keys. When you are ready to plan your move, connect with Shaw Realty Group for clear, local advice and next steps.
FAQs
Is owner title insurance required in North Carolina?
- No. Lenders require a lender policy, but an owner policy is optional and strongly recommended to protect your equity and ownership rights.
Who usually pays for owner title insurance in Chatham County?
- Local custom has often meant the seller pays for the owner policy and the buyer pays for the lender policy, but it varies by county and contract, so confirm in writing.
How long does an owner policy protect me?
- Coverage applies to covered defects that existed at the time of closing and continues for as long as you or your heirs own the property, subject to policy terms and limits.
What does title insurance not cover for Pittsboro homes?
- It typically does not cover zoning or code issues, physical condition, or matters revealed by a current survey unless you obtain specific endorsements.
How does the North Carolina attorney closing work for buyers?
- Your attorney performs the title search, resolves issues, prepares documents, conducts closing, records with the Register of Deeds, and issues final policies after recording.
