[graciegirl]

I know that there has been a previous discussion about Title Insurance and I also want to point out that Sweetie and I are NOT property virgins. (If you don't watch HGTV, you may not know that a "property virgin" is someone with very little experience in buying or selling their home.

ANYHOW. In the previous thread, it was the consensus of opinion to get Title Insurance. Period. Always get it. Amen. End of discussion.

It is not cheap. It is $1200.

My first reaction is that we certainly would not need it, since the developers of TV have a clean business reputation and this is a brand new house and we are NOT having a mortgage.

I am very thrifty. I am also very conservative financially.

A title that is not clear could have a contractor's lien against it, but that seems unlikely somehow, as big an operation as The Villages is, and the ongoing clearing and building being so widespread. People don't work for people that don't pay their contractors, and I would assume that this is a little town and word would get around if TV didn't pay.

Am I being dumb about this? My husband said to ask all of you for your opinion (again)and we will know enough to make an informed choice.

I would like to reiterate that if it was anyone but The Villages,(One of the largest and financially sound builders in the country, by all accounts,) there would be no question but to buy Title Insurance. We always have before. Eight times.

[barb1191]

I paid cash for my home in TV and did NOT purchase Title Insurance. Upon a Google search the response is as follows;

http://www.bankrate.com/brm/news/DrDon/20021219a.asp

I too am Ms Frugality and a risk-taker when it comes to insurance. Feel most insurance coverage is a waste of money. You pay and pay and pay and if you make a claim, they drop you like a hot 'tater.

They also try to sell title insurance when purchasing an auto from a dealer. DO NOT ALLOW them to add $$$$ to the bill of sale for this insurance; some auto dealers even have the gaul to have this charge ($500+) imprinted on the bill of sale. Total waste of money.

I challenged this charge with a local auto dealer in Leesburg when I bought a car there, and they wrote me a check to refund this charge.

Just my opinion, for what it's worth. .....barb

[Lil Dancer]

We didn't buy it either. In our case, the bank has their title insurance, and we hold a small mortgage. Our thought was, if something happens, the bank's insurance would cover things. I agree, the chance of a contractor's lien is small. I suspect most people don't question this type of charge, they just go out and get it. We tend to be pretty frugal, and this looked to be overkill. I'm sure you'll get many opinions to the contrary, however.

[Paul T]

When you say “The Bank has their Title Insurance” does that mean you paid a fee at closing that covered their Title Insurance but did not include you the owner? Let me guess, - you paid over two grand for the banks Title Insurance and then were offered the same for another $1200. What in the world would that $1200 really be for other than the typing cost to add your names to the banks name on the insurance documentation? Did the Loan disclosure documents indicate a fee for Title Insurance but leave out the fact that it was only for the bank? If so, is that a demonstration of best business practices? And, if so, would you recommend such an institution to a friend or family member considering a mortgage?

[Lil Dancer]

To my knowledge, the lender always requires title insurance to protect their interest up to the amount of the loan, and owners are advised to get their separate title insurance policies.

There is quite a bit on the internet regarding title insurance, kickbcks to lending institutions, etc., and the fact that once the owner gets the insurance it may be written up in such a way that it may not cover him/her in all situations.

In any event, it appears that title mistakes are rare, so we didn't purchase it.

[SteveFromNY]

Perhaps all these years in NY has made me more paranoid than most, but I always understood title insurance protected against more than a lien. If some local dug up a deed from the 1800's that said your land is his, there could be a problem.
$1200 is a small percentage of the overall cost, and I just thought of it as part of the price. Like one of the taxes you pay.

[Boomer]

This topic sure has been invited to the dance a bunch of times. But that's OK. I'll let it give me another twirl.

You know how people say, "The bank requires title insurance for mortgages, but I am paying cash so I don't need it."

I might be being dense, but I have never understood that logic.

If you are paying cash, you are the bank.

Now, I know that you could say that the bank is just requiring title insurance to make money on selling the policy itself, not because they are concerned, no matter how remotely, about losing their investment in your mortgage.

Well, maybe. Maybe not.

But because I can't get past the fact that if I pay cash, I am the bank, I will just do what the bank does and get the title insurance.

Expensive?

Maybe. Maybe not.

For me it's the cost of sleep.

You really don't have to figure out whether or not to buy title insurance.

You just have to figure out your own cost of sleep.

Boomer

[Lil Dancer]

Exactly. Whether you pay cash or not, you are assuming all risks. I guess it depends on how much you judge the risks to be, as to whether or not you get the insurance. We've owned many properties over the years, and we've never once(knock on wood) encountered any title problems, nor have we ever met a single person that had a title problem that required the use of their insurance. Doesn't mean that it will never happen, obviously, but we felt the risk in our case is extremely small. We also felt the Villages probably did a good job of vetting the original titles when they purchased land. I understand that most people want there to be zero risk, so I respect that.

[Boomer]

Lil D and I are saying exactly the same thing. She's right.

You see, I am one of those pretty conservative investors. You know the type. Stocks with a long uninterrupted dividend paying history. Stocks that go up and down like all the other stocks. But the check is always in the mail. (Well, at least it has been so far. But who really knows?) I am boring in the money department. To me, a cash investment in real estate is just that, an investment. So I view it like I do any other investment. Pretty conservatively.

When I write about this kind of thing, I always say that I ask myself, "What is the cost of sleep in this one?" I really do that. And it sounds like the rest of you do, too. It's just that sleep costs vary.

I am going to put a link here because some might find it interesting. This link will give you the news history of the Erpenbeck scandal that happened in Northern Kentucky awhile back. After reading about this mess, I knew that I would always buy title insurance. Cash buyers who did not were in for a long, rough ride.

This is a disclaimer, like the ones you hear on television, so I am typing really, really fast so listen closely. This link is for educational purposes only. This link has nothing, I repeat NOTHING to do with TV's developer. This link "don't say nuthin' bad about The Villages." (You have to sing that part or you will think I am using bad grammar.)

If you have read and understand the disclaimer above, and you have signed it, and you are interested in reading about a home title nightmare, click away.

http://www.enquirer.com/erpenbeck/

(Oh and this link tells you more than you ever wanted to know about this thing. But I thought I'd put it out there anyway. Actually, just reading the titles of the many articles included in the link can be an education in itself.)

Boomer

[The Great Fumar]

It is the sellers responseability to present a clear title to the buyer.....He has to buy the title insurance , not the buyer........

call a broker , and they will confirm........

fumar

[nanci2539]

I had a bad experience in MA. After living in a home for over 20 years; I found that I did not own the land my home sat on. Even with title insurance. The short version is the title insurance company paid the policy but I still did not own the land. The owner (a local developer) owned the land and wanted to build behind me. The only way he could do this was to apply for a variance using a small parcel on the side of my home as a access road. If I gave him this, he would give me the land my home sat on. The neighbors were up in arms; I was in town meetings for over five years. We started off friends, we ended up enemies. We went to court; they found in his favor; he owned the land. He offered to sell it to me for $500K. At that point, we didn't speak. And then he passed away! He died of a heart attack instantly. His wife blamed me and all the stress he was under. She told me (via a legal letter) I had a month to get out of the house or she would have me arrested!

I finally sold it back to the original builder for $80K. A fraction of what the home was worth.

By paying the policy, the title insurnace was able to walk away. So, even with insurance, I still didn't own the property!

It was a mess! My suggestion, get the insurance! At least you get compensation if there's a problem.

[784caroline]

SOrry but I really donot understand what happened to you. If you had title insurance why didnt they come to your aid? You say "title insurance company paid the policy but you still did not own the land"...what policy Then you say "by paying the policy, the title insurance company was able to walk away"...im confused!

Given your experience, why would you recommend someone getting title insurance if it failed to help you out when you needed it?

[SteveFromNY]

Originally Posted by nanci2539

I had a bad experience in MA. After living in a home for over 20 years; I found that I did not own the land my home sat on. Even with title insurance. The short version is the title insurance company paid the policy but I still did not own the land. The owner (a local developer) owned the land and wanted to build behind me. The only way he could do this was to apply for a variance using a small parcel on the side of my home as a access road. If I gave him this, he would give me the land my home sat on. The neighbors were up in arms; I was in town meetings for over five years. We started off friends, we ended up enemies. We went to court; they found in his favor; he owned the land. He offered to sell it to me for $500K. At that point, we didn't speak. And then he passed away! He died of a heart attack instantly. His wife blamed me and all the stress he was under. She told me (via a legal letter) I had a month to get out of the house or she would have me arrested!

I finally sold it back to the original builder for $80K. A fraction of what the home was worth.

By paying the policy, the title insurnace was able to walk away. So, even with insurance, I still didn't own the property!

It was a mess! My suggestion, get the insurance! At least you get compensation if there's a problem.

Nanci - what did the insurance actually do for you? What was their compensation to you? This is exactly the kind of situation I thought title insurance was supposed to protect you against, but I'm not able to tell from your post what it did to protect you.

[redwitch]

Sounds like she got back her initial purchase price of the house or at least the initial value of the land itself, just not the appreciation of the land and, possibly, not the house itself.

The biggest concern I would have with not getting title insurance is that there might be a farmer's estate somewhere down the line that has a claim. Another possibility is a sub-sub-contractor -- they frequently don't get paid and end up filing mechanic's liens. The third reason to get a policy is to protect the actual measurements of your plot. If it is later determined that a surveyor was off, you have some protection.

Basically, though, I agree that if you won't lose any sleep over not having it, then don't get it. Personally, I'd be awake nights waiting for the nasty knock on the door telling me something was wrong and losing the property but that's me (and my luck, sometimes).

[TomW]

Title Insurance, as I understand it, is insurance against errors and defects in a title search. The title search is normally done by professionals but occasionally an error is made as in the case mentioned in a earlier post. The search is supposed to turn up any claims against the property including (and especially) ownership claims. I would think that the insurance would cover any problem arising from a defective title but apparently the amount exceeded the policy limit or the insurance was for something else other than defects in the title.