Home Buying in Houston>Question Details

Trulia Houst…, Other/Just Looking in Houston, TX

Do you still need title insurance if you're paying cash for a brand new home?

Asked by Trulia Houston, Houston, TX Tue Apr 23, 2013

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Title Insurance has nothing to do with a property being financed or not. It has to do with any possible kinks or defects in previous titling to the property. Title Insurance protects you and your asset from any past issues that could arise in the future with incorrect title filing etc.

Best of Luck;

Christina Solorzano
CEO & SR Credit Repair Specialist at
Everlasting Credit Repair
0 votes Thank Flag Link Thu Apr 25, 2013
You aren't required to have Title insurance but you'd be a fool not to have it. It's a one time expense that will cover your property for as long as you own it and will protect you should there ever be a claim against your title. If you have a survey done it will all offer you protection against any boundary related issues.
0 votes Thank Flag Link Thu Apr 25, 2013
Great question.....and I have a story about how very important the title insurance is especially when buying a new home.....

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!

Good luck.
0 votes Thank Flag Link Thu Apr 25, 2013
Yes! With so many builders going out of business it would be a shame to buy a house without title insurance. Many builders that are having financial problems could have a lien on the house they just built. If a builder hadn't paid for the roofer that was contracted to put the roof on the house and that roofing contractor puts a claim on the house, then you still owe the roofing contractor their fee after you close.

Don't take the risk!

Good Luck
0 votes Thank Flag Link Tue Apr 23, 2013

Kawain Payne, Realtor
0 votes Thank Flag Link Tue Apr 23, 2013
As many of the other REALTORS have correctly stated, Title insurance for the buyer legally is optional, but it would be a bad business decision to purchase a home without title insurance. You state thatthe purchase is for a brand new home, the builders normally have title companies that you have to use for the closing of the purchase. Many title companies will not do a closing without the purchase of title insurance, therefore the seller/builder will require that you get title insurance.

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.
0 votes Thank Flag Link Tue Apr 23, 2013
NO, but would you buy a brand new car without insurance? RISKY!
0 votes Thank Flag Link Tue Apr 23, 2013
Yes, even if cash. Title insurance insures the buyer against any known and unknown leins that may be on the property. never buy real esate without title insurance
0 votes Thank Flag Link Tue Apr 23, 2013
If you're purchasing a house with a mortgage, the lender would require you to purchase a lender's title insurance for them, but the owner's title insurance is voluntary, but highly recommend. Since you don't have a mortgage they won't be a lender's title insurance, which you would had to pay only the owner's title insurance.

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.
"Only representing buyers in RI & Southern MA 100% of the Time!"
0 votes Thank Flag Link Tue Apr 23, 2013
You don't need title insurance, but why would you want to assume all that responsibility to save a few dollars?
0 votes Thank Flag Link Tue Apr 23, 2013
YES ! You need to make sure there is no title issues for the land, and that all mechanics leins have been paid off by the builder before closing.
0 votes Thank Flag Link Tue Apr 23, 2013
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