Real estate attorneys: is title insurance needed?

Its in case the title attorney missed liens or anything

I'm intrigued. I hope others comment

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So, since it's the title attorney selling the insurance and collecting a pretty hefty commission for doing do, isn't he telling you to buy the insurance in case he screwed up and missed something when he did the title search?

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When you buy owner's and lender's together its a couple hundred more on most residential transactions. I know some title attorney's who prefer not to deal with the idea that prescription has been extended for the life of ownership. The insurance companies will come calling the title attorney if the mess up is a big one anyway.

I think it's mostly a racket. I opted out of getting it on my house. A title search is pretty easy and basically ironclad.

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and I guarantee he won't get a chance to do again.

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You will not bring your future real estate business to the attorney because he is trying to sell you an owner's policy?

Hope this doesn't come across the wrong way. Just curious as to why you made that decision. I would just tell them I do not want the policy.

Now, if he continued to push I would completely understand.

Did his office provide good service otherwise?

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if he continued to push I would completely understand.

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This.

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Did his office provide good service otherwise?

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For the most part, yes, for which I will be paying him for those services. I say for the most part because he has waited until there was only one business day before the scheduled closing to get the HUD settlement form to me. (His office is also closed on Monday.) The closing date was scheduled between Christmas & New Year's so it was not a rushed closing.

And the first HUD his office emailed to me around 2PM today, they had lender's title insurance costs on the settlement when there is no lender. I called the attorney but he was out.

When I told the operator what I was calling about she transferred me to the person who prepared the closing documents. She told me she would take off the lender's title insurance. The attorney had forgotten to tell her it was a cash sale. So she emailed a corrected HUD to me. It had only the owner's title insurance but the cost was almost double the first form's amount for owner's title insurance.

Before I could digest that, the attorney called me and explained the "discount" for title insurance when both the lender & owner get it. So after removing the lender's t.i. the total only went down about $150.

I told the attorney I didn't want the owner's t.i. either but he said he was going to leave it on there so I could think about it. He said they could delete it at the closing on Tuesday and he would just refund the amount to me if I didn't want it. He also went through all the bad things that could happen if I didn't get the insurance.

IMO, most of those "bad things" would be his fault if they happened so I felt like he was selling me insurance to protect me from him. And the settlement form disclosed about 75% of the cost of the insurance was being paid to him as the selling agent. Hence my thread tonight.

He exceeded my attention span so I gave up protesting.

Long story, sorry.

I can understand your frustration with the way he handled it.

I wanted your opinion because I will be in the field in a couple years. I want to hear as many client complaints as possible so I can avoid the same issues in the future.

Thanks for the response.

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IMO, most of those "bad things" would be his fault if they happened so I felt like he was selling me insurance to protect me from him.

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Maybe he knows something you don't?

I made the closing attorney take it out at the closing or I told them I wasn't buying the house. They took it out. That was about 14 years ago.

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It depends. How much is being put down on the house?

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100%.

As I wrote earlier, it's a cash sale, for $340,000.

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to protect

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But that's my point: protect me from WHAT?

FWIW, I researched the previous owners and learned they were both professionally employed in management-type positions at their employers, both with advanced college degrees, no children, were the only owners of the house since it was built in 1991, and they owed no debt on the house. It was paid for free and clear.

In speaking with one of their former neighbors (yes, I knocked on the neighbor's door and asked him about the current owners of the house), he said they were great people, no "neighbor issues" in all the years they lived next door to him and he really hated to see them relocate out of state because of one of their jobs.

I believe those circumstances indicate a slim chance of any liens being on their property. Does that make sense?