Title Insurance, who needs it?

In our sales meeting today we had a discussion about title insurance. So, I thought I would shed some light on Title insurance. Did you know it’s optional? Only for the buyer’s coverage? The bank always requires it to cover the amount of the loan. When you go to closing on your new home, the settlement officer or attorney will (or should) ask you if you want it. Now the question is, should you get it? I always explain it this way to my clients, do you want to risk losing your house over a few hundred bucks? It’s a gamble that you may not want to take. If the Hatfields and McCoys didn’t settle their land dispute, you could lose your house. Sure there have been plenty of title searches done on the property, but not every title extractor knows if the signatures are legitimate and not forged. Here are some of the items that title insurance covered;

1. Forgery.
2. Fraud in connection with execution of Documents.
3. Undue influence on a grantor or executor.
4. False inpersonation by those purporting to be owners of property.
5. Incorrect representation of marital status of grantors.
6. Undisclosed or missing heirs.
7. Wills not properly probated.
8. Mistaken interpretation of wills and trusts.
9. Mental incompetence of grantors.
10. Conveyance by a minor.
11. Birth of heirs subsequent to date of will.
12. Incorrect legal descriptions.
13. Non-delivery of deeds.
14. Unsatisfied claims not shown on record.
15. Deeds executed under expired or false powers of attorney.
16. Confusion due to similar or identical names.
17. Dower or courtesy rights of ex-spouses or former owners.
18. Incorrect indexing.
19. Clerical errors in recording legal documents.
20. Delivery of deeds after death of grantor.
* courtesy of Universal Settlements. (I have done quite a few settlements at the office at 478 Prospect Dr, Frederick MD. Stop by and say Hi to Gail, if you have any title search questions)

So now, can you afford to gamble your house over a few hundred bucks? Buyer’s coverage will cover the difference in appreciation not just the purchase value. If you want to save a some money on the title insurance, ask your buyer’s agent to ask the sellers (via seller’s agent) if they have a copy of their title insurance when they originally bought the house. A reissue rate will save you about 40% on the buyer’s coverage. If the don’t have that, see if they have a copy of their HUD1. This will at least have the Title Insurance Company name on it. Then someone can call for a copy. YOU MUST HAVE THIS PRIOR TO CLOSING