A buyer purchases a property for $425,000 in Texas. The title insurance rates for the owner's policy are based on the purchase price: the basic premium rate is $2.57 per $100 of coverage for the first $100,000, plus $2.00 per $100 for amounts between $100,001 and $500,000. What is the total owner's title insurance premium?
Correct Answer
C) $9,070
First $100,000: $100,000 / $100 × $2.57 = $2,570. Next $325,000 ($100,001-$425,000): $325,000 / $100 × $2.00 = $6,500. Total = $2,570 + $6,500 = $9,070.
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Related Topics & Key Terms
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Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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