Should I get title insurance for a condo I'm paying cash for?
The only reason everyone gets title insurance is because 99.9% of home buyers need to take out a mortgage and mortgage companies make you pay for title insurance or they won't give you the money. In my case, I'm paying cash for a 190k condo. Do I really need title insurance? The husband and wife that Im buying it from have owned the condo for 13 years. If they had title insurance on the condo, doesn't that take care of finding out about all the previous owners? Can't I just do a search on the husband and wife to make sure they have no liens on the property?
- Anonymous1 decade agoBest Answer
Absolutely. I don't think you'll find anybody who will advise you against purchasing title insurance, whether you're paying cash or not. There could be liens on the property that you'll never be able to find on your own, and there may be liens that the sellers aren't even aware of. You could potentially lose your home just because you wanted to save a few thousand dollars. It's not worth the risk.Source(s): http://primelendingonline.com
- Expert8675309Lv 71 decade ago
That isn't true. Absolutely not true.
Title insurance is ESSENTIAL to a home purchase, and anyone who doesn't get one is a fool. They are cheap, so it's silly not to get one.
A previous owner's title insurance DOES NOT protect you in any way. It ends the day they sell it. A title insurance isn't necessarily for liens, it is also for property transfer...just because your sellers has owned the property for 13 years doesn't mean that the people that conveyed it to them had a legal right to do so.
There are endless issues that can happen with a title, not just property conveyence. If the attorney that certifies your title makes an error, and you DON'T take out title insurance, guess who pays the correction? YOU DO. An attorney NEVER guarantees title, they give a "legal title opinion". Only title insurance guarantees your title.
You also don't know that the day you close on it, someone hasn't been there that morning to file a lien against it...and it does happen. You have no idea of the financial stability of the people you are purchasing from.
- constantreaderLv 61 decade ago
Title insurance may be required by lenders, but truly it would be a fee well spent even if you aren't taking out a mortgage. Assuming the "if" about the sellers taking care of finding out about previous owners, etc., is basically a crapshoot - not something I'd want to depend on if I had that much cash tied up in a purchase. Basically, you have no handle on any of it without getting your own paperwork...particularly if someone else has tried to convince you that you don't "need" the title insurance. Get it! Never assume that someone has "taken care of" the details...get your own details and a clean title. If you can afford to buy the condo w/out a mortgage, you can afford the title insurance, right?
- fcas80Lv 71 decade ago
I suggest you buy the title insurance. It is a small premium compared to the risk that for some extremely unlikely event, someone has a claim and you end up losing your condo.
The cash versus mortgage is irrelevant.
As far as the prior title insurance, you are not a party to that insurance. If that insurance company screwed up, you have no recourse against them.
Truthfully, title insurance is way over-priced and those insurers do very well. But from your viewpoint, there is an axiom: Why risk a lot for a little?
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- AlterfemegoLv 71 decade ago
Marc, purchasing buyers title insurance protects you against anyone filing a claim to your property, or if something was missed in the title search that could pose a problem for you. Then the title company would take care of it. While the chances of that happening are small, it's like car insurance, we all know we're good driver's, however there is that chance... It's well worth the money.Source(s): Realtor/Appraiser-Minnesota
- MikeLv 61 decade ago
No, you need title insurance.
It's VERY cheap.
What if there is a lien on the property from the previous owners that they are not telling you about? Who knows what could have happened in the past.
It's like $300 bucks. Buy the insurance!