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Started By
Message
Title insurance on a lot purchase necessary?
Posted on 9/5/18 at 9:29 pm
Posted on 9/5/18 at 9:29 pm
Looking at buying a lot (rural land) and getting closing cost quotes and they are saying title insurance is optional. Is it truly necessary?
18
Posted on 9/5/18 at 9:31 pm to gsvar2004
T is usually worth it but if you are sure the title is good you can skip it
Posted on 9/5/18 at 9:33 pm to zeebo
As far as I can see it’s only been owned by 2 people ever, before that the land was govt land
Posted on 9/5/18 at 9:33 pm to gsvar2004
You are a moron if you skip title insurance. You are that sure that someone else won't frick things up?
Posted on 9/5/18 at 9:33 pm to gsvar2004
Only becomes necessary if there is a problem later on, which you have no idea right now, so regardless if it is a lot, a house, etc it is a gamble, can you afford not to get it?
Posted on 9/5/18 at 9:35 pm to O
quote:
You are that sure that someone else won't frick things up?
Serious question bc I’m ignorant here, if i pay cash and have the deed to the land how can they frick things up for me?
Posted on 9/5/18 at 9:37 pm to O
quote:
You are a moron if you skip title insurance. You are that sure that someone else won't frick things up?
I bought my land without title insurance. It was one owner, though, and he was a family friend. Check cleared and title was in hand.
If you’re sure the land owner has a title, don’t waste the money... if you have a good lawyer, that is. Luckily, my FIL’s firm has handled all of my major purchases.
Posted on 9/5/18 at 9:50 pm to gsvar2004
It's not necessary, but neither is health insurance. Title insurance is relatively cheap. Get it.
The best lawyers and title checks in the world can't prevent some nut from showing up and filing suit because he claims title because he is the illegitimate son of some old guy who farmed it 40 years ago. That kind of stuff actually happens more than you would imagine, especially if minerals are being produced in the area.
Even a minor boundary tiff with a neighbor could cost thousands in attorney fees.
Spend a few hundred and be protected.
The best lawyers and title checks in the world can't prevent some nut from showing up and filing suit because he claims title because he is the illegitimate son of some old guy who farmed it 40 years ago. That kind of stuff actually happens more than you would imagine, especially if minerals are being produced in the area.
Even a minor boundary tiff with a neighbor could cost thousands in attorney fees.
Spend a few hundred and be protected.
Posted on 9/5/18 at 9:56 pm to Twenty 49
I didn’t buy it with my land purchase. It is cheap though. Almost regretted it with the issues I had with the dirt work by previous owner.
My thoughts were since I was building on it, the title insurance would be covered under the future mortgage on the house.
My thoughts were since I was building on it, the title insurance would be covered under the future mortgage on the house.
Posted on 9/5/18 at 9:56 pm to Twenty 49
quote:
Spend a few hundred and be protected.
End thread
Posted on 9/5/18 at 9:57 pm to gsvar2004
quote:
Serious question bc I’m ignorant here, if i pay cash and have the deed to the land how can they frick things up for me?
Prior owner could have forged documents that showed improper ownership. Could be tax liens. I have an interest in a bank that has handled some real estate transactions that were later contested because of forged documents on the part of prior owners of said land.
One involved a son forging a will for his deceased mother that left him her house. He sold the house and it was later found that his siblings actually had partial ownership.
Posted on 9/5/18 at 10:01 pm to DuckManiak
Does the closing lawyer have the financial wherewithal to stand behind the title search??
An error is his responsibility.
An error is his responsibility.
Posted on 9/6/18 at 3:27 am to gsvar2004
Part depends on how many people may have owned it
Part depends on if legal description matches actual dimensions
Part depends on quality of lawyers in the chain (more correctly, paralegals getting paid less or doing sloppy work)
I purchased title insurance on property only to find out the land covered more area than the deed. Found out the title insurance did not cover this as it was additional land. While I was happy I had more, it took about 12K and a year or two to have the title made "quiet". It gets really expensive the farther back it goes and the harder it is to finds all heirs.
It seems title insurance only covers if you have less land or a defective deed on equal land. Lesson learned as a survey before closing only cost about 300 bucks and I could have negotiated a lower price at closing to cover the future legal bills and probably had the seller cover the cost of the title insurance at closing.
Live and learn.
Part depends on if legal description matches actual dimensions
Part depends on quality of lawyers in the chain (more correctly, paralegals getting paid less or doing sloppy work)
I purchased title insurance on property only to find out the land covered more area than the deed. Found out the title insurance did not cover this as it was additional land. While I was happy I had more, it took about 12K and a year or two to have the title made "quiet". It gets really expensive the farther back it goes and the harder it is to finds all heirs.
It seems title insurance only covers if you have less land or a defective deed on equal land. Lesson learned as a survey before closing only cost about 300 bucks and I could have negotiated a lower price at closing to cover the future legal bills and probably had the seller cover the cost of the title insurance at closing.
Live and learn.
Posted on 9/6/18 at 7:07 am to I B Freeman
quote:
Does the closing lawyer have the financial wherewithal to stand behind the title search??
An error is his responsibility
Insurance is the safe answer. The attorney will also have insurance IF they're intelligent.
Posted on 9/6/18 at 7:10 am to Twenty 49
quote:
It's not necessary, but neither is health insurance. Title insurance is relatively cheap. Get it.
The best lawyers and title checks in the world can't prevent some nut from showing up and filing suit because he claims title because he is the illegitimate son of some old guy who farmed it 40 years ago. That kind of stuff actually happens more than you would imagine, especially if minerals are being produced in the area.
Even a minor boundary tiff with a neighbor could cost thousands in attorney fees.
Spend a few hundred and be protected.
Great advice all around
Posted on 9/6/18 at 7:15 am to gsvar2004
If you are getting a loan to buy it, the bank usually has the title insurance so you having it too is excessive.
Posted on 9/6/18 at 7:17 am to gsvar2004
I felt the same when I bought a lot to build on. If you weigh the risks, it really is just a drop in the bucket compared to everything else.
Posted on 9/6/18 at 7:42 am to gsvar2004
Have a friend trying to unload a place, 15 acres with a clear title, UNTIL the buyer had the title researched and a previous railroad system ran through the property,,,,title insurance is paying for all of this to get straightened out
Posted on 9/6/18 at 7:59 am to gsvar2004
I would buy it, especially since it is rural land and if I will build my future residence upon it.
It’s like any insurance, you don’t think you will need it, until you do.
Lenders title insurance only covers the bank, not the borrower/owner. If a valid title problem arises and if you didn’t purchase an owners policy at your loan closing/act of sale, you could make 179 payments out of 180 of a loan and the bank would get that last payment out of the policy but you would be SOL, out that money and holding the bag trying to negotiate a deal with the rightful owners or an attorney who may be dead, out of business, etc.
FTR, I’m not an attorney.
It’s like any insurance, you don’t think you will need it, until you do.
Lenders title insurance only covers the bank, not the borrower/owner. If a valid title problem arises and if you didn’t purchase an owners policy at your loan closing/act of sale, you could make 179 payments out of 180 of a loan and the bank would get that last payment out of the policy but you would be SOL, out that money and holding the bag trying to negotiate a deal with the rightful owners or an attorney who may be dead, out of business, etc.
FTR, I’m not an attorney.
Posted on 9/6/18 at 8:05 am to Areddishfish
In a federally related loan, mortgagee title insurance is usually required. Owner's title insurance is optional. The owner's policy covers a lot of things but not all the problems that could come up. The bank's policy only covers the bank and usually does not come into play unless the bank forecloses.
I would recommend getting owners insurance unless you are personally so familiar with the property and the people involved that you know there will be no issues. So, unless you are buying your grandparents' home, where they lived for 50 years, get the insurance.
I would recommend getting owners insurance unless you are personally so familiar with the property and the people involved that you know there will be no issues. So, unless you are buying your grandparents' home, where they lived for 50 years, get the insurance.
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