[NJblue]

I have read this thread as well as the linked threads and would like to add my 2 cents. One rationale for getting the insurance was based on the theory that if the banks thought that it was necessary for their protection that when you self finanance, you, taking the role of the bank, should also take the same risk averse position. However, there is one key difference between you and the banks - the banks are not paying for the title insurance; they mandate that you pay it. Hence, their risk aversion comes at zero cost to them. When it doesn't cost you anything for insurance, of course you would mandate it.

However, when you, the cash-paying home buyer are acting as "banker", the risk/reward scenario is compeletely different. In this scenario the "banker" (you) has to pay for the insurance out of your own pocket. Now, you must weigh the risks versus the costs to avoid/mitigate the risks. My thinking is that the developer is so large and probably very highly "lawyered up" and would have researched any potential title issues very well before purchasing the land to begin with.

On the issue of a potential mechanics lien against the property. While I guess there is a slight possibility of this, one has to look at the magnitude of the risk versus the costs to mitigate the risk. Assume that a subcontractor was not paid to perform a certain function on your house; how much could this lien amount to? A few thousand dollars? Ten thousand? Does it pay to buy insurance for $1,600 against a very remote possibility of this scenario occuring when the cost to settle the issue may be no more than a few thousand dollars? Everyone has their own level of risk aversion, but in my thinking, this amounts to being over-insured.