Any title companies that will close without title insurance?
Most Popular Reply
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
8y@Joe P. so you don't care if the the title is any good, marketable or transferable? My grandmother bought a property where the taxes weren't paid in 1918, that's during World War One! When she went to sell she not only needed to pay the 1918 taxes but also the interest for the last 100 YEARS plus. Title insurance would have covered that.
I bought a property that was part of an estate in 1898, there were four heirs, but only three heirs singed the deed. When I went to sell it the buyer's title company would not insure because of the possible outstanding interest of the heirs of the missing 4th descendant. Title insurance would have cover that.
Another time I bought a property that had anew street, sidewalk and curb put in by the town. The seller said there were no outstanding liens. I bought the property got title insurance and a couple years later the town came and wanted me to pay for those improvements that weren't paid for. Title insurance covered the thousands of dollars of the unrecorded lien.
An attorney can insure the title, but usually the cost is about the same as the cost of title insurance, and if the attorney died his personal warranty dies with him, whereas a title insurance policy is good as long as you own the property.
If you never plan on selling or refinancing the property and don't care if there is some future title problem that could eat all your equity...
18 Replies
- Investor · Dallas TX, United States · Member since 2014 · 1k+ posts · 1k+ votes8y
That depends. If there is a bank loan involved then no. If you are paying cash or some sort of owner finance deal, then you can get it closed without title insurance. Most closing companies with a lawyer on staff will do that for you
- Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes8y
@Joe P. I've always had the best luck just finding an RE attorney who does closings themselves. I think if you're financing with a bank title insurance will be required most the time.
- 8yJoe P.Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 79 posts · 4 votesOP
I did not mention I am paying cash for the property. The current owner owns the property free and clear and has owned it since 1952. Seems like a very simple transaction and I would kind of like to learn how to close myself so I may go that route. Would an attorney eat up all my cost savings of not getting title insurance?
- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes8y
@Joe P. so you don't care if the the title is any good, marketable or transferable? My grandmother bought a property where the taxes weren't paid in 1918, that's during World War One! When she went to sell she not only needed to pay the 1918 taxes but also the interest for the last 100 YEARS plus. Title insurance would have covered that.
I bought a property that was part of an estate in 1898, there were four heirs, but only three heirs singed the deed. When I went to sell it the buyer's title company would not insure because of the possible outstanding interest of the heirs of the missing 4th descendant. Title insurance would have cover that.
Another time I bought a property that had anew street, sidewalk and curb put in by the town. The seller said there were no outstanding liens. I bought the property got title insurance and a couple years later the town came and wanted me to pay for those improvements that weren't paid for. Title insurance covered the thousands of dollars of the unrecorded lien.
An attorney can insure the title, but usually the cost is about the same as the cost of title insurance, and if the attorney died his personal warranty dies with him, whereas a title insurance policy is good as long as you own the property.
If you never plan on selling or refinancing the property and don't care if there is some future title problem that could eat all your equity...
- 8yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Any title company can close without issuing owners title insurance. Your problem is that PA's minimum policy amount is quite high. If I were you I might just conduct my own or pay for a title search to confirm everything looks good and then move forward. You could have a local attorney prepare the deed for a couple hundred bucks.
Gimer Law516 Reviews - 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
don't know any bank that would do a loan on a 1500 dollar transaction so to me that's obvious there is no loan
@David Krulac love your war stories.. being in one of the original states title is a for real deal.
out our way were many times a subdivision was just created way back in 1998... we just don't deal with it as much.. in my timber days when I was buying boonie property these old deeds etc would come into play.
and right now I have a landlock situation going that Chicago title is defending.. I bet they are in it 50k on legal fees now its highly complicated Old railroad right away that was bought by the state and now its a state asset were they are making it a bike and walking path and the state it turns out cannot be sued for an easement of necessity.. its quite complicated really at the end of the day its a 500k chunk of dirt they either get me my right of way or cut me a check,
Now that I am doing business in your fare state and in Charleston SC that has old old parcels and deeds that go back pre civil war.. I would NO WAY buy anything of any value without title insurance from one of the big 5..
but a 1500 dollar purchase heck that would not matter to me.. if something came up so you lost 1500.. no biggee right ? its when people get cheapo on this and buy 100k properties on quit claim deeds with no title insurance that things get dicey quickly.
I had a guy on BP hit me on PM he drank the land trust cool laid and the did the deeding them selves and now no one will insure it.. no title company will give a lenders policy.. so he is stuck in the mud.. and the seller he said won't resign
- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes8y
@Jay Hinrichs One of the counties here where I search has deeds going back to 1785. Sometimes they are hard to read as they are hand written. In addition there are records that go all the way back to William Penn the original owner of all of Pennsylvania, which means Penn's woods.
We've had many title issue problems, because that's a lot of the business that we seek that nobody else wants to mess with.
Railroad properties are a big problem, much of the RR land was never deeded, they only had rights of way, and once the tracks are removed the land reverts to the original owner or their heirs. Then of course many of the RR companies went bankrupt, or were bought by larger RR companies and no longer exist.
One of my favorite stories is about a property that two attorneys said, "There's Nothing that can be done with this property." The current deeded owner died in 1910, he was not married, and he had no children or heirs. So his girlfriend took over the property in 1910, then when she passed away her son took over the property and when he passed away, his son took over the property. Somebody wanted to buy the property and develop it and had his attorney do a preliminary title search. The attorney told the buyer, "That guy who is selling you the property doesn't own it and there is nothing that can be done." The buyer told the seller, who unconvinced hired his own attorney who said, "Yes, that's right you don't own the property and can't sell it, and there's nothing you can do." So the seller stopped paying the taxes and the property went to tax sale, where nobody would bid on the property except one person who bid the minimum bid. Two attorneys were wrong!
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@David Krulac not to side track but I think that's what I do best on BP.... most of the railroad easements in our area were owned by logging companies.. and they are recorded rights of way.
but your right railroads are about as tough as they come to negotiate with.
we have a 160 lot subdivision going and there is a railroad between us and the main road..
you would think easy we just cross it etc.. NOPE 4 million was the bid.. hell we are only paying 4.4 for the whole track.. plan B
I love this end of real estate .. most folks don't know squat about it and don't want to and rely on others you need to educate yourself on it.. and then work with the closers to make things happen.
on your tax sale one.. if it goes to tax's does not matter who owned it right at least out here it would not tax sale clears title completely in our area.. everything except property tax's are wiped off and IRS has their short redemeption period.. speaking CA and WA
NOw in Oregon to my knowledge is the only state in the county that if you don't pay tax's it escheats to the state they take it in and sell it some years later as surplus.
the state does not want to do this and will go to great lengths to help people not lose property.. I had a logging tract we had kind of forgotten about.. and I got a call from the county tax collector nice lady.. Hey just wanted to let you know you should come down her and pay your tax s or your going to lose the property.. never seen a state make phone calls LOL
- 8yJoe P.Rental Property Investor · Mechanicsburg, PA · Member since 2017 · 79 posts · 4 votesOP
@Jay Hinrichs I agree that it wouldn't be a huge deal to me if something happened and I lost the $1500. Paying almost $600 to insure a $1500 purchase seems like a little much to me. I'm not that risk averse. Now if I was paying more for the property I wouldn't think twice about a title insurance policy but paying 40% of the purchase price for it...idk about that.
I do care about having marketable title @David Krulac and to the best of my ability I would like to make sure that I will but as I just explained it seems like a high price to pay for such a low purchase price...not a whole lot at stake here.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
If it was me I would diy
- Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes8y
Originally posted by @Joe P.:
@Jay Hinrichs I agree that it wouldn't be a huge deal to me if something happened and I lost the $1500. Paying almost $600 to insure a $1500 purchase seems like a little much to me. I'm not that risk averse. Now if I was paying more for the property I wouldn't think twice about a title insurance policy but paying 40% of the purchase price for it...idk about that.
I do care about having marketable title @David Krulac and to the best of my ability I would like to make sure that I will but as I just explained it seems like a high price to pay for such a low purchase price...not a whole lot at stake here.
Funny story: "Vacant land for $1500" is literally the exact example I frequently use for when a first-time homebuyer asks when it might be prudent to skip title insurance, since I'm saying it would be incredibly foolish to skip it on their first home purchase, which is never $1500 vacant land if I'm involved in the transaction.
(The gov't made the title insurance line-item say "optional" on the residential mortgage loan disclosure paperwork, for some ungodly reason, starting in Oct 2015.)
- Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes8y
@Chris Mason I think it was an attempt to prevent illegal bundling of certain services but I agree it might have caused more problems than it solved.
- Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes8y
Originally posted by @Account Closed:
@Chris Mason I think it was an attempt to prevent illegal bundling of certain services but I agree it might have caused more problems than it solved.
Agreed, and to wit: you can't accuse the title folks of "illegal bundling" if they refuse to do the deal at all. Which is a lingering consequence of a LOT of the post-recession rules and regs. On the mortgage side before it might be "oh you have 40% down and 4x the sales price in your checking account? OK, this is a little higher risk, we'll bump your rate 1%," but now it's "sorry can't do it at all if you intend to owner occupy, it would be a 'predatory loan' to lend you the money even though you could write a check and pay the loan off entirely tomorrow."
- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes8y
@Jay Hinrichs The title companies here don't like tax sales, since they are third party sales where the seller may not have agreed to the sale. Some title companies won't touch at all unless there is a Quit Claim Deed from the seller or a Quiet title Action. The former can be difficult to get in the case of deceased owners, unknown heirs, or just people who have moved away. We had a case where the widow owner went to a county nursing home. Because of privacy laws the county would not even acknowledge that the office resided there, and the State Vital Statistics office would not give out a copy of the death certificate without a court order, also to comply with privacy laws. Stalking and privacy laws can make it more difficult to locate people.
The title insurance companies have had loses on their Tax Sale business, so that has prompted some companies not to do any more Tax Sale business. They've insured the title then the former owner file a lawsuit and got their property back.
The courts in general feel that forfeiture of real estate is too harsh an outcome for not paying your taxes and sometimes the amount owed is tiny in compared to the value of the property. But the law doesn't say if its a small amount then the sale is easier to overturn. One judge would do all he could to overturn tax sale cases, even instructing the seller's attorney on how to overturn the sale and what to say.
- 8yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Originally posted by @David Krulac:
@Jay Hinrichs The title companies here don't like tax sales, since they are third party sales where the seller may not have agreed to the sale. Some title companies won't touch at all unless there is a Quit Claim Deed from the seller or a Quiet title Action. The former can be difficult to get in the case of deceased owners, unknown heirs, or just people who have moved away. We had a case where the widow owner went to a county nursing home. Because of privacy laws the county would not even acknowledge that the office resided there, and the State Vital Statistics office would not give out a copy of the death certificate without a court order, also to comply with privacy laws. Stalking and privacy laws can make it more difficult to locate people.
The title insurance companies have had loses on their Tax Sale business, so that has prompted some companies not to do any more Tax Sale business. They've insured the title then the former owner file a lawsuit and got their property back.
The courts in general feel that forfeiture of real estate is too harsh an outcome for not paying your taxes and sometimes the amount owed is tiny in compared to the value of the property. But the law doesn't say if its a small amount then the sale is easier to overturn. One judge would do all he could to overturn tax sale cases, even instructing the seller's attorney on how to overturn the sale and what to say.
Similar things are occurring in MD. Title insurers now have a threshold... let's say tax sale occurred over less than $2000 in back taxes. Tax sale purchaser goes through entire process of foreclosing on right of redemption and gets the deed. Title insurers now will not insure subsequent transfer to a third party for value because of the original <$2000 in taxes. I assume it's because there is legislation in the works and there will eventually be such a threshold on the books.
Gimer Law516 Reviews - 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@David Krulac there ya go completely different than most states.. out here CA you buy the property at tax sale you get a deed in a few weeks or a month or so from the tax collector you record it.. its yours.. now there is a 1 year statue in CA for the owner to come back and say something was wrong with the sale.. but it is not a redemption they have to prove the county messed up the sale in some way.. the easiest way is to prove the county did not advertise the specified days.. we lost one that way.. but that was one in over a thousand my dad bought over the years.
In Oregon for Sure the county commissioners actually have the power to reverse the sale.. but that's just getting it back from the state..
next time I see you I will tell you about one case that is fascinating here. but I don't want to describe it in a public forum and give the bad guys ammo if you know what I mean.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Tom Gimer there was a big case in SF 20 to 30 years ago.. ( no rarely does an improved property in CA get all the way to tax sale its quite rare) BAre land yes thousands but not houses.
Anyway little ole minority lady loses her 1 mil dollar SF row house for less than 10k.. in that case the county supervisors over turned it.. just like Oregon would do.
but you have that one in SF right now were someone for 900. bucks bought the right of way to a Pacific Heights development.. Pac Heights the homes are 10 to 25 million.. its quite the case not sure where it ended up. but he was threatening to block the right of way unless they paid him a big preminum
- Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes8y
I would probably say that an attorney is the best bet. But I would say they will probably charge you at least a few hundred dollars for it. You might be able to find an attorney to do it for around $300 plus filing fees.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.