Buying in Prescott should feel exciting, not confusing. Title insurance is one of those line items that raises questions right when you are making big decisions. You want to know what it covers, who pays in Arizona, and how to avoid surprises before closing. In this guide, you will learn the local basics so you can move forward with confidence. Let’s dive in.
Title insurance basics
Title insurance protects you from covered title defects that existed before you closed. If a covered claim appears later, the policy can help pay legal defense costs and losses up to the policy amount.
There are two main policies:
- Owner’s Policy: Protects your equity, usually up to the purchase price. It is a one-time premium at closing and lasts as long as you or your heirs have an interest.
- Lender’s Policy: Protects the lender up to the loan amount. Most lenders require it. It is also a one-time premium at closing.
Common covered risks include forged or defective deeds, recording errors, unreleased mortgages, and unknown heirs. Typical exclusions include zoning or environmental issues and survey-related boundary disputes unless you add endorsements.
Endorsements are optional add-ons that can extend coverage. Examples include survey-related endorsements, access, zoning, or mechanic’s lien endorsements.
Prescott and Yavapai County practices
Arizona regulates title insurance at the state level. Local Prescott closings are handled by licensed title and escrow companies that work with national or independent underwriters.
Custom here often follows a common Arizona pattern: the seller pays the owner’s policy and the buyer pays the lender’s policy. This is a custom, not a rule, so you should confirm what your contract says.
Premiums are paid once at closing. Exact rates come from the title underwriter’s filed schedule. As a general example, on a $400,000 purchase, the owner’s premium is often in the low thousands. Your actual cost will depend on the policy amount, loan amount, and endorsements. Ask your chosen title company for a precise quote early.
Arizona does not have a statewide real estate transfer tax. You will still pay recording fees to Yavapai County to record the deed and any deed of trust. These fees are added to your closing statement.
From search to clear title
Here is how the title process usually works:
Order and search: The title company searches public records for deeds, liens, judgments, easements, and tax status.
Title commitment: You receive a commitment that lists the proposed coverage, exceptions, and the requirements to close. Think of it as a roadmap to a clean final policy.
Curative work: The title team clears issues such as old liens, missing releases, or errors in legal descriptions. This can take days to weeks depending on complexity.
Final policy: After closing and recording, the title company issues the owner’s and lender’s policies.
Common Prescott title issues and fixes
In Prescott and across Yavapai County, title companies often resolve:
- Unreleased mortgages or liens. Fix: obtain recorded payoffs and releases.
- Gaps in the chain of title from old probate or unrecorded deeds. Fix: corrective deeds or probate documents.
- Judgments or tax liens that attach to the property. Fix: payoff or subordination.
- Boundary and access questions tied to unrecorded easements. Fix: current survey or endorsements.
- Clerical errors in legal descriptions. Fix: corrective or reformation deeds.
- Complex clouds that resist standard fixes. Fix: quiet title action when necessary.
Simple cleanups can take a few days. Probate or heirship issues may take weeks to months. A quiet title lawsuit can take many months and adds legal expense, so it is a last resort.
Smart contract checklist for buyers
Use this quick list when you write or review your purchase contract in Prescott:
Who pays what
- State clearly who pays the owner’s and lender’s title premiums. Do not rely only on “local custom.”
Title and escrow selection
- Name the title/escrow company in the contract or state how it will be chosen.
Title commitment timing
- Require delivery of the commitment within a set window, often 7 to 14 days after acceptance. Keep time to review and object.
Survey and endorsements
- Decide if you need a current survey. If not ordering one, consider survey-related endorsements for boundary and access clarity.
Cure and remedies
- Define “clear title” for closing and set timelines for the seller to cure defects.
Cost estimates
- Ask the title company for a written estimate of premiums, endorsements, and recording fees.
Red flags to spot
- Old liens without payoffs, judgments or tax liens, unclear easements, exceptions for mechanics’ liens, or references to pending litigation or probate.
Endorsements and surveys: when they matter
Endorsements fine-tune coverage to match your property. If your property has private roads, shared driveways, or unique access, an access or survey endorsement can reduce risk. If you are buying land, acreage, or a home with fence-line questions, a current survey can help confirm boundaries. When a full survey is not practical, targeted endorsements can still offer added protection. Ask for quotes on specific endorsements so you can compare cost to benefit.
How to compare title companies
Service and problem-solving matter as much as price. Consider asking:
- Who is the issuing underwriter and what are the exact owner and lender premiums, including endorsements?
- What does your title search include and how far back do you search?
- How fast do you deliver the title commitment after contract acceptance?
- What is your typical timeline to cure common issues like unreleased mortgages or judgments?
- Where will escrow and closing occur, and are local appointments available in Prescott?
Your next steps
- Select your preferred title/escrow company early.
- Build commitment delivery and review deadlines into your contract.
- Decide on endorsements and whether to order a survey.
- Request a written estimate of all title and recording fees.
If you want a clear, step-by-step path to closing, our team is here to coordinate timelines and keep you informed at every turn. Reach out to schedule a quick consultation with Paula Stears Thomas.
FAQs
What is the difference between owner’s and lender’s title policies?
- The owner’s policy protects your equity up to the purchase price, while the lender’s policy protects the lender up to the loan amount; both are one-time premiums paid at closing.
How much does title insurance cost in Prescott?
- Premiums are set by underwriter rate schedules; on a $400,000 purchase, the owner’s policy is often in the low thousands, but you should request an exact local quote.
Who usually pays for title insurance in Arizona?
- It is common for the seller to pay for the owner’s policy and the buyer to pay for the lender’s policy, but this is negotiable and should be stated in your contract.
What is a title commitment and why does it matter?
- The commitment outlines proposed coverage, exceptions, and requirements to close; review it promptly so any defects can be cured before closing.
Do I need a survey in Yavapai County?
- A current survey is helpful for boundary or access clarity; if you do not order one, consider survey-related endorsements to reduce risk.
