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Originally Posted by SteveFromNY
How much money does title insurance actually cost? I recall it being in the hundreds of dollar range. Am I wrong? When you are talking about protection against this kind of problem, and the risk is hundreds of thousands of dollars, it seems to be such a small price. Are we talking half of a percentage point? Seems like such a nit I wouldn't take the risk of not having it.
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Steve,
You are right. It is not hugely expensive, especially when compared to what could be lost. It is based upon what you pay for the house. I can't remember the formula.
There was a huge scandal a few years ago close to where I live. A major developer who had been around for quite awhile and was well-known had not been paying his subs.
People lost their homes. Cash buyers were the ones who were left completely alone, out in the cold, if they had not bought title insurance.
Mechanics liens were crawling out of the woodwork and the plumbing and the landscaping and the heating and the air conditioning and on it went. Headlines raged for a long time and I think the guy ended up in prison.
I do think there is a comfort level that people seem to have when they buy in TV because things have run along smoothly. And I am certainly not saying that is likely to change. That is not what I mean here at all. It is just that my own cost of sleep is having that policy, even if I was buying the property from a long lost twin.
So like everybody else in these threads, I have my reasons. The main one here is that I like getting sleep. But others have their reasons, too. And their cost of sleep is likely different than mine.
And, Steve, you are so right. The cost of sleep, in this case, is pretty minimal.
Boomer