Buying a house without title insurance? 23 posts by 17 users

Posted: 04/07/2008 at 10:44AM

Believe it or not, I'm actually considering this.

My father-in-law owns a house he is interested in selling that I think would make an excellent rental property.

He's owned the property for 10 years.

According to county records, this piece of property has had only 2 prior owners: my father-in-law's father, and HIS father.

It's hard to imagine a more risk-free property to buy w/o title insurance. Title insurance in Texas is quite expensive. I'm debating whether or not I might want to save $700 by not getting this insurance.

So, knowing this will spark a healthy and educational debate... what do y'all think?

Posted: 04/07/2008 at 11:16AM

Yes, that would definitely be in the plan. Good point.

Posted: 04/07/2008 at 01:50PM

You may want to check with an attorney on that one. I have been told that once you break the chain of title the title will become unmarketable which means that you may have a problem selling it. I don't know this to be true but it would probably be in your best interest to check it out.

Posted: 04/07/2008 at 02:31PM

Having a cloud or having a " break" on the chain of title definitely makes it extremely difficult to sell a property, but not not getting title insurance on a property when you buy it doesn't necessarily mean you will have any title problems.

When a title company issues title insurance they will do a title search on the property to make sure that the title is clear. The title insurance is merely an insurance policy against any clouds in the title that the title company may have missed when they did their search.

Either way title insurance will insure that you have clear title, but not getting title insurance doesn't mean you have bad title. It just means you don't have insurance guaranteeing good title.

Posted: 04/14/2008 at 09:33PM

A title search doesn't just check ownership it checks liens too. Based on the number of sellers that convieniently " forget" that they had a second mortgage, or their sister was on the deed etc. I can't fathom NOT having title insurance.

Posted: 04/16/2008 at 07:59AM

I would get title insurance no matter what. Of course we are entrepreneurs and are all about taking risks. But this would be a dumb one to take. You need to think of the big picture: It is much better to spend a few hundred dollars up front, than to lose thousands over a problem with the title.

On all of your properties you should get the insurance-just chalk it up as the cost of doing business.

Jason R. Hanson

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Posted: 04/22/2008 at 05:43AM

Bought a rental from a brother-in-law. He was retiring and selling off his rentals. He paid off a land contract long ago. We ordered Title Insurance and found that the guy he bought it from had never filed a satisfaction of mortgage. Previous seller/lien holder had also moved away to parts unknown. Took two months to track him down and several threats by our lawyer to get title squared away.

While ordering a title search would have shown the same thing, I always get the insurance. It's cheap protection, family or not.

According to county records, this piece of property has had only 2 prior owners: my father-in-law's father, and HIS father.

Yee-Ouch! You could be buying a family heirloom first, an investment property second. And with heirlooms, all the sibling/family rivalries, claims of favoritism and perceived debt that go along with them. Here's wishing you have a very thick skin, your wife is an only child and she has very mature family members (her aunts, uncles and cousins who might also love to keep grandpa's or great-grandpa's property in the family). Good luck.

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Posted: 05/29/2009 at 09:43AM

or a couple of hours