Best of Luck;
CEO & SR Credit Repair Specialist at
Everlasting Credit Repair
As fate would have it, my parents - also Real Estate agents, purchased a home from a builder in the 80's....about 30 days after closing a man came to the door who was the provider of the lumber to the builder with his invoice that had not been paid......demanding that the homeowners (my parents) pay for the lumber in our home. They referred him to back the title company where we closed to seek any remedy that he could be entitled to.....The title company provides title insurance against liens....
Apparently, he had not filed a lien against the property previously and it subsequently was not found on their title search.
We never did find out what happened to him or if he was ever paid, but the good news is my parents, the homeowners, did not get stuck with this bill.....
What are the odds of that?
SO YES! Go through a title company!
Don't take the risk!
Even if you do find a builder and title company that will do the closing without your purchase of title insurance you have to realize that you will not be protected by any mechanics liens that might be filed by the sub-contractors who built the house. If they haven't been paid in full by the builder they will have a right to file a mechanics lien against the property. Without title insurance you would be responsible for paying off those liens/claims in order to give free title to your buyer when your ready to sell the home. As I and others have mentioned, the cost of title insurance is very little compared to the expensive risk you take by not getting it.
I always recommend to my clients to purchase owner's title insurance, if the lender thinks it a good idea to protect them self and to lower their risk I say to my clients don't you think you should do the same for a minimum amount of money. Just because your paying cash I would still purchase the owner's title insurance.
People are human and mistakes do happen and the title search only go back so far. Without title insurance you would have to hire an attorney if anyone tried to claim they had interest in your property. Retaining an attorney to defend your title would cost you way more then purchasing the owner's title insurance.
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