Title insurance
I am a new to investing in real estate. I was told that I should have a title insurance. My question is what is title insurance and why I need to buy the insurance.
Most Popular Reply
Two reasons:
1. First and foremost, if the title insurance company is going to turn down the claim, why does it matter if they turn it down before I resell the property or after? If I'm going to be on the hook for paying off the loans either way, I'd rather at least be rid of the property in meantime so I'm not paying holding costs or have to worry about the market continuing to drop while I wait for the title insurance company to evaluate the claim.
2. This way I don't need to file the claim at all until after the buyer's title company investigates. It's quite possible (very likely, in fact), that these loans were properly discharged in the first place and they aren't really clouding title -- the buyer's title insurance company will attempt to determine that before they push it back on me. So, this way, I have a title attorney investigating before I ever make a claim, giving me MORE chance of resolving the claim without paying. By the way, consider two attorneys had previously not flagged these loans (both on my purchase and refi), I believe they probably aren't an issue.