Any Reason for Owner's Title Insurance on New Construction?

[djlnc]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.

[fishon]

If you are going to have a mortgage the bank will require you to buy title insurance to protect them, not you.

[Dotneko]

We didn't buy it. New home in the middle of a new development.
The villages SELLS title insurance policies. That in itself tells you they don't plan on needing to pay out.

[djlnc]

If you are going to have a mortgage the bank will require you to buy title insurance to protect them, not you.

That's lender's title insurance, not owner's title insurance.

[retiredguy123]

I bought it, but, obviously, the risk is lower for a new house than for a resale. But, over many years, it is less expensive than homeowner's insurance. But, also, if there were no risk, why do lenders require it?

[Papa_lecki]

We didn't buy it. New home in the middle of a new development.
The villages SELLS title insurance policies. That in itself tells you they don't plan on needing to pay out.

You do know the company that SELLS insurance probably doesn’t pay out for a claim? The policies are covered by an insurance company.
The Villages sells it as aconvenience for the buyer and mortgage co (and they make money on it).

[Challenger]

Many previous threads on this subject. There are a number of possible claims against properties that can date back many years. Title policies will provide legal representation as well as reimbursements.

Millions of $ are spent on defense from things like the failure to get the sign off of an heir or partial owner in the chain of ownership that might date back for many decades. Google the subject and make sure you understand the risk that you are taking to save $ 1500+/- when engaging in a $300, 000- 500,000 purchase.

[golfing eagles]

Many previous threads on this subject. There are a number of possible claims against properties that can date back many years. Title policies will provide legal representation as well as reimbursements.

Millions of $ are spent on defense from things like the failure to get the sign off of an heir or partial owner in the chain of ownership that might date back for many decades. Google the subject and make sure you understand the risk that you are taking to save $ 1500+/- when engaging in a $300, 000- 500,000 purchase.

Absolutely true. Just because the home was new on property bought by the developer, the title history of the land can go back pretty far. In NY, the big risk was Indian land claims. Lawyers would go back hundreds of years and research whether the person who bought land from native Americans or signed a treaty actually had the authority of Congress or the British crown to do so, and then the fun began.........

[Babubhat]

Absolutely true. Just because the home was new on property bought by the developer, the title history of the land can go back pretty far. In NY, the big risk was Indian land claims. Lawyers would go back hundreds of years and research whether the person who bought land from native Americans or signed a treaty actually had the authority of Congress or the British crown to do so, and then the fun began.........

So many ridiculous things can come up. A bankruptcy 3 owners ago held up a deal at last minute . Why not an issue previously is incomprehensible

[retiredguy123]

I once bought a house and the title search revealed that, two owners ago, a divorced woman had sold the house. Her ex-husband's name was on the deed, but he didn't sign off on the sale.

[sail33or]

I used to be in this business. If you read the fine print of any Title Insurance Policy, they "EXCLUDE" anything that would actually come up.

Seller/Owner signs closing paperwork declaring they have clear title with no liens and can sell the property. If they lied, they can be sued.

[retiredguy123]

I used to be in this business. If you read the fine print of any Title Insurance Policy, they "EXCLUDE" anything that would actually come up.

Seller/Owner signs closing paperwork declaring they have clear title with no liens and can sell the property. If they lied, they can be sued.
Obviously, people can be sued, including the company who did the title search. As I understand it, the purpose for the title insurance is that, if any suing takes place, it is done by the title insurance company. The same way it occurs with any insurance claim.

[Boomer]

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[Worldseries27]

i bought it, but, obviously, the risk is lower for a new house than for a resale. But, over many years, it is less expensive than homeowner's insurance. But, also, if there were no risk, why do lenders require it?
because someday an obscure entity will appear before the supreme court saying this land was taken illegally from his ancestors who wrote about it on an obscure cave wall and the sc will rule in their favor

[Lisanp@aol.com]

Have you heard of the Native Americans? Do you really want to pay to defend your title to the land? Just buy it, it’s a necessary evil in a RE transaction but $1500 sound way too high it should be closer to $600-$700.

[kitnhead]

I bought it, but, obviously, the risk is lower for a new house than for a resale. But, over many years, it is less expensive than homeowner's insurance. But, also, if there were no risk, why do lenders require it?
My guess is that the lenders have a hook-up going with the insurers. The rule for buying any insurance: weigh all of the risks. If you are going to pay more over time for the insurance product itself than it would cost you to replace the item, or in this case defend you claim, then the insurance is not worth it. If you are insuring a potentially catastrophic event that has a likelihood of occurring (car accident with injuries) then it is worth it. A good example is buying insurance at one of those electric stores. You buy an item for $150 and they sell you insurance for $4 per month. Odds are you’ll pay more in insurance than you paid for the product in the end.

[westernrider75]

We did not buy it and bank did not require it on our new home.

[Mrfriendly]

I once bought a house and the title search revealed that, two owners ago, a divorced woman had sold the house. Her ex-husband's name was on the deed, but he didn't sign off on the sale.

If the divorce was finalized in the court, the divorce decree will stipulate who gets title of the home and property. That is enough to satisfy title company ensuring the chain of title and no need to spend the money to make a new deed and have recorded.

[Wondering]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.
$1500 seems high. Better safe than sorry. Don't know if someone, before The Villages bought the land, may have a claim to it.

[Love2Swim]

If the divorce was finalized in the court, the divorce decree will stipulate who gets title of the home and property. That is enough to satisfy title company ensuring the chain of title and no need to spend the money to make a new deed and have recorded.

We bought two houses in The Villages and didn't get the insurance on either one. I'd say your risk is very low.

[RiderOnTheStorm]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.

The bank charges you for a title search and then charges you again for title insurance in the event their own search was defective. They should not have it both ways; either charge for the search or the insurance, not both. Nice business if you can get it.

[golfing eagles]

$1500 seems high. Better safe than sorry. Don't know if someone, before The Villages bought the land, may have a claim to it.

To paraphrase a line from the movie "Contact": We can think of dozens of reasons to buy title insurance, it's the reasons we haven't thought of that makes it a good idea

[RustyN]

When you close on a new home you are provided a guarantee that the title is free and clear. But that is from tv. If you think they may go out of business then you may want to get it. Lol. Different story on a preowned home. Bottom line is do what makes you feel comfortable.

[retiredguy123]

If the divorce was finalized in the court, the divorce decree will stipulate who gets title of the home and property. That is enough to satisfy title company ensuring the chain of title and no need to spend the money to make a new deed and have recorded.
That could have happened, but the title search attorney tracked down the ex-husband in another state and he was willing to sign off on the sale. The divorced woman was not the current seller and could not be located. I'm not sure all title companies would accept an unrecorded deed, especially if the divorce decree was from another state.

When my mother passed away, her will gave me her house as the only heir. I had to go through probate to get permission from a court to sell the house. I could use the will and death certificate to change the name on her vehicle title, but not on the house. Bummer.

[retiredguy123]

When you close on a new home you are provided a guarantee that the title is free and clear. But that is from tv. If you think they may go out of business then you may want to get it. Lol. Different story on a preowned home. Bottom line is do what makes you feel comfortable.
I agree, but, if The Villages sells you a defective title, do you really want to hire a lawyer and sue them?

[jparsoneau@aol.com]

So what I have not seen on here is this question is about new construction which is built by The Villages, sold by The Villages. And titled through The Villages escrow department. They offer you title insurance through The Villages. Yes these are all different sister companies all owned by the villages.
The only real legit question is what if on this property 5 million years ago idians owned it and have a legal right to it now. And if that’s the case I would come back and sue The Villages. But having The Villages sell you a house and sell your title insurance is basically paying the same person for the same thing that you’ve already bought.
Plus I do believe the village is doing this for 30 years plus hast to know what they’re doing at least a little bit by now.
And no I did not buy it on my new house no need. On a used house I would definitely buy it

[retiredguy123]

So what I have not seen on here is this question is about new construction which is built by The Villages, sold by The Villages. And titled through The Villages escrow department. They offer you title insurance through The Villages. Yes these are all different sister companies all owned by the villages.
The only real legit question is what if on this property 5 million years ago idians owned it and have a legal right to it now. And if that’s the case I would come back and sue The Villages. But having The Villages sell you a house and sell your title insurance is basically paying the same person for the same thing that you’ve already bought.
Plus I do believe the village is doing this for 30 years plus hast to know what they’re doing at least a little bit by now.
And no I did not buy it on my new house no need. On a used house I would definitely buy it
The cost, value, and reasons for buying title insurance are pretty much the same everywhere. The Villages is not unique in that respect. But, one of the reasons for having title insurance is that you don't need to sue anyone in the event of a defective title. The insurance company is supposed to handle it.

Also, human beings have only been around for about 150,000 years.

[Fltpkr]

We can speculate about the likelihood of a future insurance claim or the scope of the coverage. I understand the reasoning for not spending money needlessly, but the homes here are huge investments and commonly cost $400,000 - $ 700,000. The one-time cost of the title insurance for an investment that large, even if the risk is very small, is an easy decision for me.

[kkingston57]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.

Great ? Looks like another way for title companies to make money. Only way there might be a problem is if the estate of someone like Christopher Columbus claimed they have ownership rights to the property.

[golfing eagles]

So what I have not seen on here is this question is about new construction which is built by The Villages, sold by The Villages. And titled through The Villages escrow department. They offer you title insurance through The Villages. Yes these are all different sister companies all owned by the villages.
The only real legit question is what if on this property 5 million years ago idians owned it and have a legal right to it now. And if that’s the case I would come back and sue The Villages. But having The Villages sell you a house and sell your title insurance is basically paying the same person for the same thing that you’ve already bought.
Plus I do believe the village is doing this for 30 years plus hast to know what they’re doing at least a little bit by now.
And no I did not buy it on my new house no need. On a used house I would definitely buy it

You might be technically correct. However, what do you think is easier (and less stressful):

Buying a one-time title insurance for $500-1000 OR suing The Villages?????

[golfing eagles]

Great ? Looks like another way for title companies to make money. Only way there might be a problem is if the estate of someone like Christopher Columbus claimed they have ownership rights to the property.

The point is taken. Of course, Columbus never set foot on Mainland America.

[BlueStarAirlines]

If you are going to have a mortgage the bank will require you to buy title insurance to protect them, not you.

Thats lenders title insurance......

[Stu from NYC]

The cost, value, and reasons for buying title insurance are pretty much the same everywhere. The Villages is not unique in that respect. But, one of the reasons for having title insurance is that you don't need to sue anyone in the event of a defective title. The insurance company is supposed to handle it.

Also, human beings have only been around for about 150,000 years.

Another way the developer makes money. Betcha title insurance Co pays hefty commission to him.

[Stu from NYC]

The point is taken. Of course, Columbus never set foot on Mainland America.

Many years ago the Chinese and the vikings came here.
Rumor has it someone has a co of their title squirreld away waiting for right moment.

[mikemalloy]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.

OK my 2 cents. I'd pay for title insurance for myself if I was buying a home from a prior owner of the home. However, here, I've bought 2 new homes from the owner ie. The Villages. If there is something wrong with the title to my house, I'll sue TV since they gave a warranty deed and I'll be entitled to my attorney's fees.
What's even more frustrating is getting a mortgage through Citizen's First bank and them requiring title insurance. What they are in effect making you do is insure that they (The Villages) gave you a valid unencumbered title. That way they don't get sued by you you just put in a claim on the insurance they made you buy. Rip off.

[tuccillo]

If the buyer of a new home winds up with a defect in their deed, there are also probably hundreds, perhaps thousands, of others who will have the same defect since The Villages buys large tracks of land to build on. That would be a mess and probably make national headlines. I agree that buying title insurance for a resale is a good idea.

OK my 2 cents. I'd pay for title insurance for myself if I was buying a home from a prior owner of the home. However, here, I've bought 2 new homes from the owner ie. The Villages. If there is something wrong with the title to my house, I'll sue TV since they gave a warranty deed and I'll be entitled to my attorney's fees.
What's even more frustrating is getting a mortgage through Citizen's First bank and them requiring title insurance. What they are in effect making you do is insure that they (The Villages) gave you a valid unencumbered title. That way they don't get sued by you you just put in a claim on the insurance they made you buy. Rip off.

[talonip]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.

No need. We just bought new in St. John’s. Financed through Citizens.. it was optional.

[Babubhat]

[QUOTE=jparsoneau@aol.com;2158888]So what I have not seen on here is this question is about new construction which is built by The Villages, sold by The Villages. And titled through The Villages escrow department. They offer you title insurance through The Villages. Yes these are all different sister companies all owned by the villages.
The only real legit question is what if on this property 5 million years ago idians owned it and have a legal right to it now. And if that’s the case I would come back and sue The Villages. But having The Villages sell you a house and sell your title insurance is basically paying the same person for the same thing that you’ve already bought.
Plus I do believe the village is doing this for 30 years plus hast to know what they’re doing at least a little bit by now.
And no I did not buy it on my new house no need. On a used house I would definitely buy it

I have a hard time believing the developer failed to get clear title to the land for new home. But once attorney fees are involved it’s expensive and time consuming. You never know

[Worldseries27]

I'm just waiting for the casino

[Stu from NYC]

We're purchasing a house in the Village of Richmond. Seems to me there is virtually no risk of some sort of previous claim against the property. Don't want to waste $1500.

When the village Indian tribes lawyer files a claim watch out. L0

[golfnut]

We bought two houses in The Villages and didn't get the insurance on either one. I'd say your risk is very low.

My risk has nothing to do with the fact that you choose not to buy title insurance. I have purchased 10 homes over the years and have purchased title insurance on every one. I'd say you are at risk without insurance, good luck.

[TCRSO]

As a Florida Attorney, my opinion is that you do not need insurance when purchasing a new home in TV. The title policy protects you from title issues. However, if there are title issues you also have a claim against the transferor (assuming you acquired the property by warranty deed). Obviously TV is solvent so if there is a problem, you should have no problems. Of course if it makes you feel safer, that is your choice.

[retiredguy123]

As a Florida Attorney, my opinion is that you do not need insurance when purchasing a new home in TV. The title policy protects you from title issues. However, if there are title issues you also have a claim against the transferor (assuming you acquired the property by warranty deed). Obviously TV is solvent so if there is a problem, you should have no problems. Of course if it makes you feel safer, that is your choice.
How many companies were assumed to be solvent until they weren't?

And, even if they are solvent, they are most likely not going to pay for your house unless you sue them.

[Babubhat]

As a Florida Attorney, my opinion is that you do not need insurance when purchasing a new home in TV. The title policy protects you from title issues. However, if there are title issues you also have a claim against the transferor (assuming you acquired the property by warranty deed). Obviously TV is solvent so if there is a problem, you should have no problems. Of course if it makes you feel safer, that is your choice.

Pyrrhic victory. Legal fees to enforce will exceed the cost of title insurance. Risk vs reward is out of balance

[affald]

Lol. Just look up what percentage of title company premiums go toward paying claims vs how much is kicked back to attorneys. Who has anybody known personally that has collected on a title policy? Lawyers need not respond.

[RI401]

Another way the developer makes money. Betcha title insurance Co pays hefty commission to him.

Its a 50% commission.

[RI401]

In Rhode Island,
A small southern town found the land had been incorrectly surveyed. The line had some people living in Connecticut once it was re drawn. Yup, you want to have an owners policy for that kinda stuff.
Bud