Do I need an owner title insurance when buying a house?

12 Replies

Hi guys,

I am buying a turn key property and title company asking me if I want to purchase a owner title insurance.

I do understand what owner title insurance protecting you from, but isn't it a title's company job to make sure there are no any clouds on the property? No other owners and the property is clean and ready to be conveyed?

So if yes, then in simple words I a buying this insurance to protect myself from title's company mistakes?

Another thing, If I am buying a turn key property, that means when turnkey company bought that property, they for sure already make sure there are no any liens on it, is that correct assumption?

Thank you



They should have made sure there was clear title, and usually the seller pays for title insurance not the buyer (at least in my area)  The title company assures there is clear title to the best of their knowledge and then provide an insurance policy that they will pay out if they were incorrect.

Originally posted by @Pollyanna Gomez :

Hi guys,

I am buying a turn key property and title company asking me if I want to purchase a owner title insurance.

I do understand what owner title insurance protecting you from, but isn't it a title's company job to make sure there are no any clouds on the property? No other owners and the property is clean and ready to be conveyed?

So if yes, then in simple words I a buying this insurance to protect myself from title's company mistakes?

Another thing, If I am buying a turn key property, that means when turnkey company bought that property, they for sure already make sure there are no any liens on it, is that correct assumption?

Thank you

In simple words, yes you are correct.  But, Title Insurers are companies that are run and manned by humans, so are not perfect. 

 

Originally posted by @Scott Wolf :
Originally posted by @Pollyanna Gomez:

Hi guys,

I am buying a turn key property and title company asking me if I want to purchase a owner title insurance.

I do understand what owner title insurance protecting you from, but isn't it a title's company job to make sure there are no any clouds on the property? No other owners and the property is clean and ready to be conveyed?

So if yes, then in simple words I a buying this insurance to protect myself from title's company mistakes?

Another thing, If I am buying a turn key property, that means when turnkey company bought that property, they for sure already make sure there are no any liens on it, is that correct assumption?

Thank you

In simple words, yes you are correct.  But, Title Insurers are companies that are run and manned by humans, so are not perfect.

 

YUP  title insurance is something that you need when you need it.  if i look at my 4 decades and thousands of loans i made or properties i bought. I have had 4 title claims and  just had one payoff last month..  title missed that the house had a order to demo or move it.  they paid the full policy  took 90 days of whining but they paid..  other one I have the property was landlocked and Chicago missed it..  we have been 3 years negotiating with the state and neighbor and just about got it done.. they paid for the attorney the whole time.  this is a 600k property that would be worthless without access .. 

and I had another access one when i was doing timber.. title company bought me an access.  but over time I suspect what i have paid in policies i could have been self insured.. but lenders dont let you go without it so its moot anyway.

For average investor who might buy and sell less than 10 to 20 homes in a career.. to me its mandatory to get title insurance from one of the big nation wide title insurers.. 

and PS from the lenders side of it ABSOLUTEly need it. it covers you for forgery.. I took over a HML book in 89 and it turned out long story but 15 million of the loans in the book one of the players had forged all those deeds.. title paid out.. he went to San Quentin to cool his heels for 9 years. I wont go into detail how these are done as i dont want to give anyone any idea..

 

Originally posted by @Scott Wolf :
Originally posted by @Pollyanna Gomez:

Hi guys,

I am buying a turn key property and title company asking me if I want to purchase a owner title insurance.

I do understand what owner title insurance protecting you from, but isn't it a title's company job to make sure there are no any clouds on the property? No other owners and the property is clean and ready to be conveyed?

So if yes, then in simple words I a buying this insurance to protect myself from title's company mistakes?

Another thing, If I am buying a turn key property, that means when turnkey company bought that property, they for sure already make sure there are no any liens on it, is that correct assumption?

Thank you

In simple words, yes you are correct.  But, Title Insurers are companies that are run and manned by humans, so are not perfect.

 

Exactly in attorney states or states they still use abstractors ( who are humans)  or like on the west coast our title plants are now in the Philippines.. 

 

Not accurate. Title insurance protects against a lot more than just mistakes. Many problems can arise no matter how diligent the title examiner is.

We have an interesting one going now where, 3 transfers back, 2 brothers conveyed to 1 of the brothers. Brother 1 sold the property and has since disappeared. Guess what... yep, brother 1 defrauded brother 2. Brother 2 is now suing everybody in sight.

Buy the owners coverage.

Performing a title search and obtaining title insurance are two common requirements homebuyers encounter, particularly during the mortgage closing process. Simply put, the title is the official document reflecting legal ownership of the property, and it is conveyed as the property is sold over time. Although the completion of the title search and purchasing of title insurance is a standardized process, it can raise important questions about the ownership of your property. 

If at any point in the property’s history, the title is compromised by a forged or fraudulent deed, a previously undisclosed or unknown heirs with adverse claims on the property, or a simple mistake in the public record, any and all subsequent transfers can be null and void. A title search goes back through the history of the title transfers to see if there are any potential issues regarding the ownership of the property. This process can uncover a lot of information on a property. For example, a title search can lead to information regarding any easements, leases, existing lines of credit, unpaid taxes, or other restrictions.

A title search involves a thorough investigation of the official land records in the area for all records of conveyances, foreclosures, leans, taxes, or any other documents reflecting what may have happened in the legal history of the property. Title searches can uncover deeds , mortgage documents, lean documents, or other issues that could affect the sellers ability to convey clear title to the real estate property.

Once a company completes a title search, they often will offer title insurance period a title insurance protects your risk of loss associated with problems that arise in the legal title to your property. Title insurance is typically purchased for a one-time payment, and rather than hedging against the risk of future loss like most insurance policies, this feast secure as a safeguard against financial or legal risk arising from defects in land title not detected during the search.

@Pollyanna Gomez no you do not NEED title insurance, it is not a requirement. However you are a FOOL if you do not get title insurance. I think it is especially important with a turn key deal. It is very easy to be scammed buy a turn key operator.

My company is currently being sued because a title company missed our active foreclosure during a refinance. 

Obtaining title insurance is a common requirement homebuyers encounter, particularly during the mortgage closing process. As you well know, the title is the official document reflecting legal ownership of the property; conveyance of the title demonstrates how the property was conveyed or sold over time. 

Issues with the title can raise important questions about the ownership of your property - which is exactly what traditional title insurance is meant to protect against. However, you have to be careful with respect to exactly who is the named beneficiary on the title insurance policy. In most cases, it's your lender; if there is a defect in title, they protect your bank from financial liability. If you want to protect yourself from financial liability in the event of an unknown defect in title, you may want to purchase an owner's title insurance policy. 


Hope this helps, and good luck with your purchase!

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