Real Estate Agent · Greenville, SC · Member since 2021 · 210 posts · 142 votes
3y
Title insurance protects the buyer from potential undisclosed liens or defects in the title of the property that aren't discovered during the title search before the closing of the sale. These could include things like unpaid property taxes by the previous owner, errors in the property records, or claims of ownership by someone else.
Title insurance isn't a requirement to purchase a property, especially if you're buying with cash. However, it can be risky to buy a property without it, because you'll be financially responsible for any undisclosed liens or title defects.
Mechanic's liens are a legal claim against a property by someone who has done work on the property and hasn't been paid. This type of lien wouldn't automatically be applied just because you're not getting title insurance. Instead, it could arise if, for example, a contractor did work on the property before you bought it and the previous owner didn't pay them.
It sounds like what you are trying to say is that there is currently a lien on the property and if you don't get title insurance the lien will stay in place on the property until its paid. I would get the title insurance and make the seller pay the lien out of their proceeds.
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y
If a licensed contractor or handyman worked on the property they can file a lien which sticks on the property until you pay them or get a court ordered release.
Many other problems can pop up. How can you be sure the person you are paying is the legal owner?