is Title insurance required? I have been sent bill detals

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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
4y

Most lenders will require it. You are allowed to shop for this insurance. You may save a little, but it probably won't be worth your time. 

If you pay cash for the property, you aren't required to purchase title insurance. People do stupid things all the time. Not buying title insurance is one of them. 

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  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    4y

    Most lenders will require it. You are allowed to shop for this insurance. You may save a little, but it probably won't be worth your time. 

    If you pay cash for the property, you aren't required to purchase title insurance. People do stupid things all the time. Not buying title insurance is one of them. 

    1Reply
  • Kathy Johnson
    Real Estate Professional · Hayfork, CA · Member since 2015 · 231 posts · 212 votes
    4y

    If there is ever a question later about the property boundaries, easements etc the title insurance can help pay to correct problems.

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y
    Lenders title insurance is required by the lender. Owners title insurance is optional.
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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    4y

    Required by most if not all lenders.  If you are buying cash not a requirement but I think it is worth its cost and then some.  That said we have bought a ton of deals on QCD with no title insurance but you need to understand the risks when you do that.  For us we were getting the homes at such a discount the risk was worth it.  

    For the general investor buying the general house, worth it.  

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  • Yashar Fred
    OP
    San Antonio, TX · Member since 2021 · 65 posts · 13 votes
    4y
    Originally posted by @Scott M.:

    Required by most if not all lenders.  If you are buying cash not a requirement but I think it is worth its cost and then some.  That said we have bought a ton of deals on QCD with no title insurance but you need to understand the risks when you do that.  For us we were getting the homes at such a discount the risk was worth it.  

    For the general investor buying the general house, worth it.  

    I understand and thank you for the suggestions. I am curious to know What are the risks ?  

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  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    4y
    Originally posted by @Yashar Fred:

    The risks include that the person selling you the home is not the legal owner or have the legal right to sell it to you. There could be liens against the property. Unpaid taxes. Easements that prevent you from doing anything with the property. Basically stuff that would wipe out the entire value of the property. 

    Imagine this, buying the property and then finding out the home was built on a utility company easement and it must be torn down and nothing can legally be built on the property. 

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  • Scott M.
    Real Estate Broker · Rochester Hills, MI · Member since 2009 · 2k+ posts · 2k+ votes
    4y

    Some risks are liens that you are not aware of that would be found/covered by the title company/insurance.  Seller doesn't own the property at all or maybe just in part.  Maybe they own it with other people but doesn't have the right to sell it.  Maybe they own part but not all.  Maybe any of this happened with the last seller or the seller before that and so on.  Could be as simple as an outstanding water bill or tax that goes into foreclosure etc  Some houses have federal liens against them or child support liens etc.  Title co's and title insurance covers you for the unknown just like property and liability.  For the cost, it is a no brainer yes.  

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