Owners Title Insurance - to buy or not to buy

[Sunshine Shelly]

I'm looking for input. Is homeowner's title insurance a necessary cost at settlement on a new construction property in TV?

[perrjojo]

Will you insure your home against fire, hurricane, etc? It's your biggest investment. Yes, I would buy title insurance.

[Bay Kid]

It is a one time cost that will last the life of ownership.

[Allegiance]

I think in Florida the seller pays for the owners title insurance.

[leftyf]

I have always required the seller to pay for title insurance and I have always paid for it when selling a house. If only one person skips keeping the insurance up to date on every sell, it makes it more expensive the longer you wait. I feel it's a requirement to know I am actually getting what I paid for.

[asianthree]

Op is buying new. She will have to foot the bill

[karostay]

All property's in the Village have a clear tittle or the developer wouldn't build
Just ask your agent..It's a great money maker just like termite care when your home has a 5 warranty

[janeg]

You don't have to buy it at closing . You need to buy it if you ever sell your home.

[Allegiance]

Only 5% goes to pay claims? Is this true, very interesting.
Inside America's Richest Insurance Racket - Forbes (http://www.forbes.com/forbes/2006/1113/148.html)

[perrjojo]

Only 5% goes to pay claims? Is this true, very interesting.
Inside America's Richest Insurance Racket - Forbes (http://www.forbes.com/forbes/2006/1113/148.html)
It's a racket til you need it.

[perrjojo]

All property's in the Village have a clear tittle or the developer wouldn't build
Just ask your agent..It's a great money maker just like termite care when your home has a 5 warranty

Someone owned the property before the developer ( perhaps many) and some problem could have been overlooked. It is unlikely there would be a problem but no guarantee.

[kellyjam]

It works out to to 1/2 of 1% of the purchase price. I think that is a small price for peace of mind.

[MikeV]

Look closely at your closing estimate. If you do not buy the owners title insurance there may be a charge for you to pay for the lenders title insurance. Once we saw the difference between what we would pay for just the lenders and what we would pay for the buyers we went with the buyers title insurance.

[Allegiance]

It works out to to 1/2 of 1% of the purchase price. I think that is a small price for peace of mind.


They make exorbitant profits because its only a "small" percentage. The fees should be 75% less. The kickbacks to the law firms are large and most likely legal.

[dbussone]

I think in Florida the seller pays for the owners title insurance.


In TV the purchaser absorbs the cost.

[Allegiance]

In TV the purchaser absorbs the cost.

One factor in favor of buying a resale.

[784caroline]

Look closely at your closing estimate. If you do not buy the owners title insurance there may be a charge for you to pay for the lenders title insurance. Once we saw the difference between what we would pay for just the lenders and what we would pay for the buyers we went with the buyers title insurance.

QUESTION: Is the lenders title insurance only for the value of the loan or for the price you paid for the property??

[MikeV]

QUESTION: Is the lenders title insurance only for the value of the loan or for the price you paid for the property??


Lenders insurance only covers the mortgage amount.

[Indydealmaker]

A Seller's policy does nothing for a buyer. Owner's Title Insurance protects you financially against human error during a title search. Of course, if you don't think humans ever err...

[Villager Joyce]

If you are obtaining a loan to purchase the property, the lender will require a mortgagee title insurance policy. There is little difference in price between purchasing just a lender policy and buying an owner policy and purchasing simultaneously a loan policy.

[Challenger]

I'm looking for input. Is homeowner's title insurance a necessary cost at settlement on a new construction property in TV?

There are previous threads that discuss this subject and it would be good to read them to see the issues involved.

You will receive many posts from people who are not familiar with the issues involved and the types of claims that can be made against your property. Even if a claim in not valid , you will need to defend against it. If you are insured , the Ins Co provides and pays for the defense.These cases can be long and drawn out and very expensive.

I have owned 8 homes and ran three community banks. I would not go uninsured- the stakes are too high.

Talk to an attornet who specializes in Real Estate transactions

[Bonanza]

I think in Florida the seller pays for the owners title insurance.

In Florida, depending upon the county in which you live,
it's the county that usually determines who pays for title insurance.

However, be aware that it is not a law and the "rule" is not cast in concrete.
Who pays for title insurance is up for negotiation.
It can always be written into a contract regarding who pays it,
even when a clause is pre-written in.

In new construction here in TV,
if you think the developer will pay it, think again.
It will never happen, so save your breath.
There is no free ride!

[784caroline]

Lenders insurance only covers the mortgage amount.

So the amount that you bought also covers the mortgage amount

[Bonanza]

So the amount that you bought also covers the mortgage amount

A lender's policy is completely different and separate
from the other title insurance policies.
It benefits only the lender and you have to pay for it.
The lender requires it; otherwise you don't get the loan.
And yes -- it is based on the mortgage amount, not the sales price.

In addition to that policy, as a buyer,
there is an owner's policy which is completely separate.

Hopefully, this answers your question.

[Carl in Tampa]

Developer has clear title? Wait until that obscure Spanish Land Grant shows up that proves the entire tract is the property of Don Diego de la Renta. THEN you will be glad that you have title insurance.

[Bonanza]

All property's in the Village have a clear tittle or the developer wouldn't build
Just ask your agent..It's a great money maker just like termite care when your home has a 5 warranty

It is true that the developer got clear title
on the property when he purchased.

However, that is no guarantee for you as a new buyer,
that the seller is giving you clear title.
Your seller could have liens or other issues against the property,
or suddenly, a claim from the past.

In theory, the fact that an owner got clear title is meaningless
when you are the next buyer.
You are buying protection for yourself.

You are correct and hit the nail on the head, though.
Title insurance is a great money maker!

[Bonanza]

You don't have to buy it at closing . You need to buy it if you ever sell your home.

True . . . You don't have to buy title insurance at closing. You don't have to buy it at all and you can actually buy it at any time. However, for peace of mind and protection, it's a good idea to get it when you close.

You don't wait to purchase title insurance when you sell.

During the time frame when you've owned it, there could be an old claim against the property that appears that you aren't even aware of. If you have title insurance, you are protected; otherwise you have to go through the expense and hassle of obtaining clear title for your new buyer. When your new buyer gets his title insurance, you can bet he will demand a clean title from you!

[Bonanza]

There are previous threads that discuss this subject and it would be good to read them to see the issues involved.

You will receive many posts from people who are not familiar with the issues involved and the types of claims that can be made against your property. Even if a claim in not valid , you will need to defend against it. If you are insured , the Ins Co provides and pays for the defense.These cases can be long and drawn out and very expensive.

I have owned 8 homes and ran three community banks. I would not go uninsured- the stakes are too high.

Talk to an attornet who specializes in Real Estate transactions

Bingo and thank you on all counts!
You are correct.

There is too much mis-information within these posts
from well-meaning people
who are only guessing and don't understand.

[Bonanza]

:a040:Developer has clear title? Wait until that obscure Spanish Land Grant shows up that proves the entire tract is the property of Don Diego de la Renta. THEN you will be glad that you have title insurance.

Your example is very funny and very true!
:a040:

[Sunshine Shelly]

Thanks everyone for your feedback. Great information from the group. We're settling on a new villa on Friday and we bought the insurance.

[784caroline]

A lender's policy is completely different and separate
from the other title insurance policies.
It benefits only the lender and you have to pay for it.
The lender requires it; otherwise you don't get the loan.
And yes -- it is based on the mortgage amount, not the sales price.

In addition to that policy, as a buyer,
there is an owner's policy which is completely separate.

Hopefully, this answers your question.

So buyers (new and resale) should be aware they are NOT insuring their entire home value just the amount of the mortgage (which declines) if the owner decides to piggy back on what the bank holding their mortgage requires in terms of title insurance.. If you are buying a $300K home and have a $150K mortgage, you still are 50% exposed.

[Challenger]

Thanks everyone for your feedback. Great information from the group. We're settling on a new villa on Friday and we bought the insurance.

Peace of mind is worth a few bucks. Welcome to our little piece of Valhalla.

[Bonanza]

So buyers (new and resale) should be aware they are NOT insuring their entire home value just the amount of the mortgage (which declines) if the owner decides to piggy back on what the bank holding their mortgage requires in terms of title insurance.. If you are buying a $300K home and have a $150K mortgage, you still are 50% exposed.

No, you are not exposed and you are completely insured.

Let me try to explain this in a different way . . . You buy a property and you have a mortgage. For the purpose of this explanation, the amount doesn't matter. Your lender requires title insurance. For all intents and purposes, this has no meaning for you and doesn't affect you other than the fact that you have to make a one-time payment for it at closing. Don't worry about the lender's policy; forget about it. From that point on, you will never hear anything about the lender's policy at all.

Now, you want title insurance. The title company or attorney who handles your closing will do what is called a "simultaneous issue." This means the lender's policy and your policy (which is completely separate and only yours) will be issued at the same time -- at closing.

The lender is insured for the amount of your mortgage. They're happy!
You are insured for the total amount of your new home. You're happy . . . and safe!