I received a phone call today from a man who called us back in 2011 to do a current owner search for him, which showed no judgments. He ended up purchasing the property WITHOUT title insurance. Because he paid cash for the property, there was no lender requiring him to obtain title insurance so it was simply a call he made. He did not go through us to purchase it but went through his attorney to close.
Fast forward to 2018, he is now selling the property and the buyer’s title company is stating there are judgments from previous owners (one being an $8,000 probation judgment). The judgments were not on our search because we were only asked to do a current owner mortgage and judgment search.
Had this guy purchased title insurance, he would have gotten a full 40-60 year search, paid around $550.00 for the policy and now would not be scrambling to try to figure out why he didn’t get title insurance.
Moral of the story is always cover yourself with title insurance because you never know what could happen.
DAILY REAL ESTATE NEWS
Despite the pace of home sales and home price appreciation slowing, most Americans remain optimistic about the housing market. More than half of Americans – 53 percent -- recently surveyed say they believe home prices will continue to rise within the next 12 months, according to Bankrate’s September Financial Security Index, a survey of more than 1,000 adults about their personal finances.
Why Some Are Optimistic
Why the Second Half of 2014 Will Be Better Than the First
Builders Haven't Felt This Confident Since 2005
Yet, those expected home price rises didn’t stretch to everyone: Those living in suburban and rural areas were more than twice as likely to say that prices would drop compared with urban dwellers.
"This may not be a great market, but it's a good market," says Jed Smith, managing director of quantitative research at the National Association of REALTORS®. "Prices are still increasing. The market is just stabilizing." The median expected price increase among NAR’s REALTOR® members for the next 12 months is 3.4 percent, Smith notes.
In the Bankrate.com survey, only 8 percent of respondents said they believed home prices will fall while 31 percent said they felt prices would hold steady.
"If they are confident in the housing market, they are more likely to participate and maybe put in a bid that is closer to the asking price," says Greg McBride, Bankrate's chief financial analyst. "People in a lot of markets are getting close to the asking price, if not more."
Americans’ overall optimism over home prices may stem from greater confidence over their personal finances. Americans are feeling more financially secure, in their job security and net worth, according to the index. Twenty-six percent of Americans feel more secure about their jobs compared with a year ago, and 27 percent of respondents said their net worth is higher this year than last year.
"Housing is one of two things — the stock market being the other — that consumers look to as an indicator for whether things are headed in the right direction or the wrong direction," says McBride. "The expectation of continued home-price increases underscores an expectation for continued improvement in the job market, household finances, and the overall economy."
Source: “September 2014 Financial Security Index Charts,” Bankrate.com (September 2014) and “Consumers Still Expect Rising Home Prices,” Bankrate.com (September 2014)
There are two types of title insurance: owner's title insurance, called an Owner’s Policy, and lender’s title insurance, called a Loan Policy. Most lenders require a Loan Policy when they issue you a loan. The Loan Policy is usually based on the dollar amount of your loan. It only protects the lender's interests in the property should a problem with the title arise. It does not protect the buyer. The policy amount decreases as you pay down your loan and eventually disappears as the loan is paid off.
An Owner's Policy is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts for as long as you have an interest in the property. Only an Owner's Policy protects the buyer should a covered title problem arise. Possible hidden title problems can include:
Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy.