What is your opinion of Title insurance

[Junkman]

what is your opinion of title insurance on real estate? Pros and cons of purchasing it? History... I am considering purchasing a piece of property that was once part of the original parcel of the property that I presently own. The one time that a title question came up about the boundary lines, the title company offered no help or money in resolving it. Paid to resolve it myself. Does it have any other value to me? /forums/images/graemlins/confused.gif

 

[DUMBDOG]

It is my understanding that Title insurance is just what it is called. It is to protect you in case of someone putting a claim to the property that you own. When you purchase the property, you pay someone to examine the history of the property to make sure that there are no liens, etc against the property. The Title insurance would kick in if they missed something or someone would put a claim against the property that was not recorded. A boundry line dispute would not fall into this category.

Cheap insurance down the road if something would pop up concerned you having a valid claim to the property that you own.

 

[beenthere]

I understand Title Insurance is meant to cover your investment in case you lose your property as a result of someone successfully and legally claiming your property.

It is in place of a clear Abstract, which can be difficult and expensive to obtain.

An example might be a lost heir that would make your property proven in court to belong to someone else who has claim to it. Then your investment would be covered and you would be reimbursed, but you would no longer have the property (just the money). Most mortgage loans require the Title Insurance or a clear Abstract (and even then often require the Title Insurance).

Your example would not be covered, because the Title Insurance isn't insurance (assurance) that any boundaries are correct or in the right place.

I hope I explained that well enough. /forums/images/graemlins/smirk.gif (Well said, DUMBDOG !!)

 

[Joe1]

If you finance the property, the lender will insist on this or they will not fund a loan. It's important to them, it should be even more important to you.

Joe

 

[Alan L.]

I've never thought of buying a piece of property without title insurance. Lendors will require it, so its just a question of whether you also want an owner's title policy, and this I would do.

 

[RamTruckMan]

Title Insurance is a necessary expense, but is too expensive. To top it off you have to buy it every time you refinance, even with same lender. I refinanced twice in past five years because of falling interest rates. It cost about what one year of fire and casuality insurance cost and there is sure a lot bigger risk with fire and casuality.

I am in the real estate business and title claims are very rare.

You pay a lawyer to search the title and then you have to buy title insurance to protect the lender and yourself. To top it off in Maryland you can only buy title insurance from a lawyer. I assume that is the same in other states. They get paid for the title search and then they probably get half of the insurance premium.

In my business if I make a mistake me I am on the hook.

It is a necessary expense, but the premium needs to be adjusted to the risk. Very little risk for such a high premium.

 

[California]

</font><font color="blue" class="small">( Does it have any other value to me? )</font>

Yes. The Preliminary Title Report researches and discloses any known claim against the property. The most common claim is probably a Mechanic's Lien by a laborer or supplier who claims he never was paid, even if you or a previous owner had paid a prime contractor in full.

Among other perils insured against might be the question of whether the property was sold to you by someone who had authority to conduct the sale. You can't research these as effectively as a title company.

I think you want to buy the policy to be sure you own the new parcel unchallenged. Insurance is simpler than resolving claims later.

A boundary survey is a separate issue you might want to resolve by field survey if the deed conflicts with neighbors' deeds - again cheaper than resolving a problem later.

 

[Bird]

I agree with RamTruckMan; a necessary expense. I never bought any property without a title policy. Now a new survey is another matter. When I bought the last place, out in the country in late '94, there were iron pipe stakes at the 4 corners, and all the paperwork showed a rectangular piece of property of exactly 10 acres. I was talking to a local banker and he said when they finance property, they require a title policy, but not a survey. He said, "In fact, on the last property we had surveyed, we had 3 different surveyors survey it and they came up with 3 different answers." /forums/images/graemlins/shocked.gif I did not have mine surveyed. However, when I sold it in '02, the buyer wanted a new survey and was willing to pay for it. According to the surveyor's report, it was a couple of inches off being exactly rectangular and totalled 10.001 acres. /forums/images/graemlins/grin.gif Needless to say, the buyer did not move the existing fences. /forums/images/graemlins/laugh.gif