[Challenger]

Originally Posted by graciegirl

We have purchased two NEW homes in The Villages for cash. We have chosen to not buy title insurance.


With all the folks buying here and all the sturm und drang about every little thing, we have yet to hear anyone got burnt on a new home that the developer owned the land previously.


I am not advising anyone to pass on it. We have ALWAYS purchased title insurance on all homes in the past.


I figure the developer was crossing his t's and dotting his I's.

Problem is that it doesn't matter if the Developer crossed the Ts and dotted the i s if some one previously in the chain of ownership made a fraudulent conveyance or was incompetent at the time of conveyence, or had a faulty meets and bounds description. Why take a chance for a few hundred dollars in a six or seven figure purchase?

[Justus]

Originally Posted by Challenger

Problem is that it doesn't matter if the Developer crossed the Ts and dotted the i s if some one previously in the chain of ownership made a fraudulent conveyance or was incompetent at the time of conveyence, or had a faulty meets and bounds description. Why take a chance for a few hundred dollars in a six or seven figure purchase?

My thoughts and experience exactly.

[NYGUY]

Originally Posted by Boomer

AAAAAUGH!!! It makes me crazy when I hear people say that cash buyers do not need title insurance.....

There are two kinds of title insurance. Lender's title insurance covers the bank for the amount of the mortgage. Of course, a bank requires it of the borrower. But as the mortgage amortizes, the bank's interest becomes less and less.

BUT.....Owner's title insurance covers the buyer for the entire amount paid for the house and stays with the buyer throughout ownership of the insured property.

The reason it makes me crazy when people say cash buyers do not need title insurance is because.....Hellooooooo, when you are buying a house for cash YOU are the bank. I would be protecting my investment in the house, just like a bank would do.

So anyway, if you do not want to buy owners title insurance because you are a cash buyer who is willing to assume total risk for your investment in your house, that is your prerogative. But please, please, please stop telling people that cash buyers do not need title insurance.

Give a Google to Owners Title Insurance and do a little reading. The cost of sleep varies.

(Full disclosure: I am speaking of title insurance in general, nothing specifically about Florida or TV. I know that who pays what where can be different from state to state. And I am not a lawyer. My rant is about advice that might not be so good. Something as simple as a typo in an old deed or an old mortgage that was not released, like happens sometimes with family mortgages, could have the power to bring down the house if it shows up years later and people cannot be found to sign affidavits and quit claims and such. Oh My!)

It's nice to have a well written understandable post....thank you Boomer!!!

[NIPAS K-9]

Originally Posted by dsnrbec

McLinn Burnsed said they would not close a transaction without it. Does anyone know of a settlement office that will?

Must be new i didnt have too

[applesoffh]

Sorry, but I'll never understand how people can pay hard earned money to purchase a home here, or anywhere for that matter, and not spend a little bit more to insure a clean title. This topic has come up in the past and it amazes me that people still ask. I was an apartment dweller in NYC and now I'm a homeowner here, and I would never have purchased without Title insurance. Why on earth take a chance on your most expensive possession?

[Challenger]

Originally Posted by applesoffh

Sorry, but I'll never understand how people can pay hard earned money to purchase a home here, or anywhere for that matter, and not spend a little bit more to insure a clean title. This topic has come up in the past and it amazes me that people still ask. I was an apartment dweller in NYC and now I'm a homeowner here, and I would never have purchased without Title insurance. Why on earth take a chance on your most expensive possession?

In many cases it is because they received bad advice on sites like this from posters who have no real knowledge of the subject.

[biker1]

It was several thousand dollars.

Originally Posted by Justus

My thoughts and experience exactly.

[biker1]

Insurance is a calculated risk. Why pay for something if the odd of needing it are very remote. I choose to self insure a lot of things. In the case of buying a new home in The Villages, the odd of needing title insurance is very remote. With a resale, the odds are different. The title insurance was very pricy - several thousand dollars.

Originally Posted by applesoffh

Sorry, but I'll never understand how people can pay hard earned money to purchase a home here, or anywhere for that matter, and not spend a little bit more to insure a clean title. This topic has come up in the past and it amazes me that people still ask. I was an apartment dweller in NYC and now I'm a homeowner here, and I would never have purchased without Title insurance. Why on earth take a chance on your most expensive possession?

[CFrance]

Originally Posted by Challenger

Problem is that it doesn't matter if the Developer crossed the Ts and dotted the i s if some one previously in the chain of ownership made a fraudulent conveyance or was incompetent at the time of conveyence, or had a faulty meets and bounds description. Why take a chance for a few hundred dollars in a six or seven figure purchase?

Exactly. It happened to us in NJ in a development. The problem went back to before the land was even acquired by the developer. And it wasn't on every single house around us, either--just our house and one or two others. We all had title insurance. Someone made the problem go away. This was in the mid '80s, and I don't remember exactly what happened.

[Dr Winston O Boogie jr]

Here is what a lawyer friend wrote in response to an e-mail that I sent asking him about the subject.

1. Owner’s Title Insurance is a waste of money, UNLESS you end up needing it, such as is the case with many insurances! Titles are examined by “people” and sometimes they make mistakes and overlook something that they should have discovered which affects the validity of your title and/or the security interest of the Lender, or perhaps imposes a lien on the property which must be satisfied before it can be later conveyed, or a house is built over, or too near, the boundary line, etc. The Lender’s Title Insurance Policy covers the Lenders’ interests, but does “nothing” for you.



2. I do not know about “zero”, but It is probably accurate that there is not a great chance that there will ever be an issue with the title of a new home sold by The Villages; however, it is not “unthinkable.” [ I think it is fair to mention in this regard that there is a “close” relationship between the developer, the builders, Properties of the Villages and the myriad of separate legal entities involved in the development, construction and sale of Villages homes.] Title issues can include not only matters related to the “chain of title” but also things such as matters of survey, zoning, unpaid liens, easements, covenants, failure to get all heirs of an estate to convey their interest in large tracts of property, access to public streets, rights of ingress and egress, etc…matters which may not become an issue until years down the road [if ever]. [ Coverage of some of these matters occasionally could require special endorsements to the policy and sometimes additional premium.]



3. Truth is many residential home purchasers do not buy Owner’s insurance. Often, this is simply due to the cost; or they mistakenly believe that somehow the Lender’s Policy provides them some protection or comfort. The vast majority, probably well over 95%, of homebuyers never have a title claim, regardless of whether the Seller is The Villages or some other developer, in which case the owner’s title insurance premium would have been a waste of money, if you discount peace of mind.



4. All of the above being said, even if you decide to purchase an Owner’s Policy, it is extremely important to know what it covers and what it does not. The pre-printed boiler plate language on the policy cover sheets generally apply to all policies. However, the “Schedules”, i.e., inserts into the policy, can contain “exclusions and “exceptions to coverage, and, as a practical matter, can negate the benefit of the policy.



Case in point: I had an investor come to me several years ago who had purchased two (2) side-by-side condos from the same seller and had purchased Owner’s policies for each. One of the Condos, for some inexplicable reason, had access to the nearest public street and the adjacent condo did not. The investor believing that she was fully covered as to such matters by virtue of having purchased the policies, apparently at closing did not read the “Exceptions” Schedules contained in the Policy related to the Condo unit which did not have public access…it was expressly excepted from coverage under that policy….Naturally, the corporate Seller had since dissolved and was no longer around to respond to the issue.


Morale of the story: If you buy an owner’s policy, be sure to ask for a draft prior to the closing; read the “exclusions” and “exceptions” from coverage and if you do not thoroughly understand them, require the closing attorney to explain...completely! If it still does not make sense, do not close until you are satisfied.

[Villager Joyce]

Originally Posted by biker1

Insurance is a calculated risk. Why pay for something if the odd of needing it are very remote. I choose to self insure a lot of things. In the case of buying a new home in The Villages, the odd of needing title insurance is very remote. With a resale, the odds are different. The title insurance was very pricy - several thousand dollars.

///

[Dr Winston O Boogie jr]

Can anyone explain why, in my case, the bank's cost for title insurance is $25.00 and the owner's cost is $1,005? isn't it the same coverage for the same home? I am mortgaging 80% so why isn't my cost only four times theirs?

[Dr Winston O Boogie jr]

Originally Posted by CT514s

Recently we tried to sell our house on our own. Contacted 3 different closing agents, including McLin and ALL three would not close without title insurance. In my former life I worked as a Real Estate Paralegal and while I certainly understand the benefits to title insurance, I have never heard of a closing agent requiring it. It just seems unjust that they will close new construction without it, but mandate it for a resale. Seems to be only in this area.

I'm beginning to find that there are a lot of things in the way that real estate transactions are conducted with The Villages and Properties of The Villages that are "only in this area". More specifically, only in The Villages.

My sisters sell real estate up north and she is astounded with some of the things I tell her about this transaction.

[Dr Winston O Boogie jr]

Originally Posted by Challenger

and well you should. But there are many title defects that go undiscovered for many many years . I have enoiuntered illegal conveyences dating back more than 50 years. Sometimes by people not even in the chaim of ownership.

And as far as I'm concerned, that shouldn't be my problem. If the Villages (or anyone for that matter, bought a piece of property that had an issue with the title, and then sold it to me, it should be their problem for not having done their due diligence. Why should be burden and cost be on me to insure that they did their job correctly? Why should I have to pay for their mistake?

[Challenger]

Originally Posted by Dr Winston O Boogie jr

Here is what a lawyer friend wrote in response to an e-mail that I sent asking him about the subject.

See post #39-- Finally someone who has the expertise to speak on a complicated subject and give a frame of reference for a very important decision . IMO flying naked on the biggest purchase most families will ever make is not clear thinking. An old adage , but still valid "penny wise and pound foolish"