I am buying raw land from people who have a quiet title and are giving me a warranty deed.....do I need title insurance?

Asked by Mesaviewer, 27539 Wed Dec 21, 2011

I have met with the sellers and their lawyer - they say that title insurance is an un- necessary expense as they have quieted the title to the land and are giving me a warranty deed. They also said that when I develop said land (drill a well etc) that I will have to get a new title insurance policy so this one would be redundant in the future....is this correct? any input? should I still go ahead and get title insurance?

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Duana Draszkiewicz’s answer
Duana Draszk…, , Los Lunas, NM
Thu Sep 13, 2012
Title Insurance is to protect you--quiet title only protects the seller. If someone comes forward later who was not involved in the quiet title you would be at risk. Before the title company issues title insurance they run a title search to be sure nothing is there if they miss something the insurance will cover you Duana Draszkiewicz, Agent Los Lunas NM
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Steve Quinta…, Agent, Albuquerque, NM
Mon Apr 2, 2012
If the sellers quieted title they did so for themselves. The court issued a ruling that binds parties to the lawsuit. The immediate question is whether the lawsuit was handled properly. Title insurance answers this question by insuring your interest in the land. The cost of insurance can be found here at the link below.

If you get title insurance in the future it would be in connection with an event affecting title, like a sale or mortgage loan. Drilling a well, by itself, would not trigger the need for title insurance.

There are times when title insurance can be skipped. Those times usually involved experienced investors, intra-family transfers, distress sales, very inexpensive purchases, or an attorney letter attesting to the state of the title. .

Title insurance is customarily paid for by the seller. It is the seller's way of proving they have good title to convey. The fact your seller is does not want to show you clear title via title insurance is a red flag that should be investigated before purchase.
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Jan 2, 2012
Well, Mesaviewer, what happens if there is a cloud on the title - do you think the Sellers, having taken your money and gone off and done other things, will answer your phone call and stand by that warranty? That's why we have title insurance, because it's the insurance company that will provide the warrant, not the seller.

Here's a tip: You should not be buying real estate from people who have a lawyer on their side without a lawyer on your side, too.

All the best,
0 votes
Scott Asbill, Agent, Albuquerque, NM
Mon Jan 2, 2012
Just like auto insurance you may never need it or you might need it tomorrow. I suggest contacting any title company office they will be happy to give you a consultation with the pros and cons at no charge. It's better to have answers from a title company than to rely on "they said" and potential surprises later on.
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