In the state of Pennsylvania, title insurance rates are state mandated and, more often than not, level from vendor to vendor.
Besides the reasons given by others, remember that when you sell your house , the buyers is going to get title insurance , you will b eresponsible to take care of any issues that may arise.
There are horror stories like an ex-spouse showing up , mechanics lien etc.
It is wise to purchase said insurance to protect you just in case something happens.
Sometimes, things get missed. An unregistered deed shows up and now someone else claims they own your house. A builder placed a lien on the house saying the house owes them $45,000. Something from back in 1850 written on the deed says the land can not be subdivided but it was. Now the heirs of the person who put that in want your land because it was subdivided against what was allowed by the deed.
All kinds of strange things could happen to place your complete ownership of a house in jeopardy. Most likely it never will happen to you. But this is called cheap insurance to cover you just in case.
The worst thing that could happen if you buy a house without title insurance is you have something come up that could take the house from you. A very small risk, but... WHAT IF???
They could have sold it someone else before they sold it to you, they could have huge liens on the property, they may not even be the person who is currently on title!
They could have sold a share of it to someone who has just become your not-so-silent partner, they could have an undisclosed spouse with a claim to the property, or there could be any number of ways that the Seller does not have what we professionals call "Clear and Marketable Title" to the property!
What's title insurance costing you? How much cash are you putting into the deal?
It is so important to to have a title search done before settling on a property and purchasing title insurance. Title insurance is for your protection.
Many do not have a clue as to what title search and title insurance are. In brief, title search is a process that searches the deeds to the property as far back as records are shown on the property to see if the property has a clear title. No property can be sold without a clear title.
After the serach, the title insurance is purchased so that if a claim against the property should arise because it was missed in the search, you will be protected against it.
As you can see, it is very important to get a title search and title insurance on the property. You will benefit from it in the long run.
Brigita McKelvie, REALTOR, e-PRO, GRI
Pennsylvania Licnese #RS297130
Keller Williams Real Estate, Bethlehem, PA
Office: 610-867-8888 Direct: 610-393-9424
Blog site: http://activerain.com/blogs/brigitam
What if the brother of the current owner has a deed dated a year ago that he filed and the current owner knew it but sold you the property anyway. You're hosed!
Do you know if the taxes are paid? How about if there are any litigations against the property?
I suggest calling a title company and asking them why. They will tell you real horror stories.
Here is a simple answer....lenders require title insurance. They want to be sure that nothing will jeopardize the property at some point in the future, especially of the buyer defaults on the loan.
Since you are paying cash, don't you want the same protection? How would you feel if liens were discovered after you took ownership and you were now responsible for payment.
Title insurance is a one time cost that is very affordable. Don't fool around with this. Get a good closing company who will handle your settlement and ORDER THE INSURANCE!!
Good Luck with your transaction.
The best way to answer this is with a question only you can answer. Are you willing to take the chance that there may be a cloud on the title? Meaning, the purpose of title insurance is to protect you just in case there is something that can affect the future sale of the property.
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