Home Buying in Philadelphia>Question Details

Victor B, Home Buyer in 60062

Is title insurance necessary if I am buying a property with 100% cash? What are the risks of not having one at closing?

Asked by Victor B, 60062 Sun Feb 14, 2010

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15
Title insurance is important as others have already explained.
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.
Web Reference: http://www.gitabantwal.com
2 votes Thank Flag Link Mon Feb 15, 2010
Why title insurance? If the title company does a title search why are they not liable if someone shows up later with a claim? We pay for the title search and then they want us to also buy title insurance in case they missed something. Why not just buy the title insurance and forget the title search? Why are we to buy both? Seems to me as though this is double dipping. Is the title companies in partnership with the insurance companies? Where are the law makers when the public is getting screwed. I hired the title company to do the title search, most companies have insurance in case they mess up, why does the title company not carry insurance?
1 vote Thank Flag Link Thu Aug 27, 2015
Here's some interesting info on title insurance that may help you decide.
http://blog.franklyrealty.com/2007/01/owners-title-insurance-95-buy-it-but.html
Flag Thu Aug 27, 2015
From Wikipedia, title insurance is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of the comparative deficiency of the US land records laws. It is meant to protect an owner's or a lender's financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.

In the state of Pennsylvania, title insurance rates are state mandated and, more often than not, level from vendor to vendor.

Good Hunting!
1 vote Thank Flag Link Mon Feb 15, 2010
It is no more necessary to buy title insurance than it is to buy collision and theft insurance when you buy a $100,000 car.

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???
1 vote Thank Flag Link Sun Feb 14, 2010
thank you. good reply!
Flag Mon Jan 14, 2013
Victor,
Seek the advice of your attorney. Several real estate agents below are clearly giving you legal advice, which is against the Code of Ethics of the National Association of Realtors (NAR).

Article 13, NAR Code of Ethics:
REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.
0 votes Thank Flag Link Wed Jul 20, 2016
Absolutely! Even as investors, when we purchase with cash we get title insurance. Like Marc has said, you want to make sure you have clear and marketable title which is what title insurance makes sure of.
0 votes Thank Flag Link Fri Feb 15, 2013
its not that necessary to really get it. I know there is insurance in vancouver that has a few differences in it, but nothing too different
0 votes Thank Flag Link Fri Feb 15, 2013
The risk is that the Seller doesn't own the property, but now they have your money.

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?

Whaddya think?
0 votes Thank Flag Link Mon Feb 15, 2010
Good morning, Victor!

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
Mail to:brigita@brigitamklv.com
Web: http;/www.brigitamklv.com
Blog site: http://activerain.com/blogs/brigitam
0 votes Thank Flag Link Mon Feb 15, 2010
typical realtor answer, bottom line is the tile company which did the search should carry the insurance and be liable for any losses the buyer might incur. Double dipping big time. Forget the title search and just buy the title insurance, I bet the title agent would be strictly against that
Flag Thu Aug 27, 2015
You should always purchase title insurance as it will help you in the long run if there is an issue that was not discovered in the title search, such as non-recorded leins or injury claims that were not reported prior to your purchasing the property. Always remember that once you take title to the property everything pretaining to the property is your responsibility.
0 votes Thank Flag Link Sun Feb 14, 2010
Title insurance is the smartest thing you can get when you buy a property.

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.
Web Reference: http://fredglick.com
0 votes Thank Flag Link Sun Feb 14, 2010
Hello Victor,

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.

Carol Cei
ReMax Millennium
215-643-9661
carolcei@remax.net
Web Reference: http://www.carolcei.com
0 votes Thank Flag Link Sun Feb 14, 2010
i refused title insurance.it was forced on me by a third party. I received a document of about twenty pages, after the fact/sale that i did not see before the sale. The document was full of legal jargon/a foregin language i do not speak that appeared to be bind me to giving interest to my property to the state and county and many other things that i did not agree with.It seems like a devisive way for the government to steal my land and to take interest in it without my authority/intercourse with out consent....isn't that ......rape?
Flag Thu Mar 31, 2016
MOST DEFINATELY and especially for cash buyers as the risk is greater. For what you pay in title insurance, it would cover 1 hour of an attorney if a title defect came up. You are more apt to see tiotle issues when you sell the property or if you ever refiance. So a title search before buying and title insurance is an owners best friend. It is not what happens during your purchase or ownership, it is what happened when every other owner boought, refinancinced or sold teh property,. Missing releases, death certificates, missing pages, missed spelled names or missing property descriptions pop up all the time. It is worth every penny.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sun Feb 14, 2010
Good afternoon Victor,

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.

Peter Lavelle
Citizens Premier Real Estate Fox Chase
215-725-0500

BUYER PERFECT PURCHASE PROGRAM
Buy any house with us, and if you are unsatisfied
with your purchase within 2 year, we'll sell it for FREE.*
http://www.peterblavelle.com
*conditions apply
0 votes Thank Flag Link Sun Feb 14, 2010
You should have title insurance. It only protects you if someone had an interest in the property prior to you purchasing it. They will check the title to make sure you get what you think you are getting. Title insurance is for your benefit, yes you need it.

Thank You,
Brian Fletcher
Lincoln Realty
(610)312-3158
Brian@BuyingwithBrian.com
0 votes Thank Flag Link Sun Feb 14, 2010
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