Owner's title insurance for cash purchase - lawyer says mandatory

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aws
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Owner's title insurance for cash purchase - lawyer says mandatory

Post by aws »

We are closing on a new house purchase in two weeks. Our realtor referred us to an attorney that he liked which we may engage to do the title search and closing, but in the welcome letter from her she said she requires all buyers to purchase owner's title insurance if they are paying cash, which we are. From some quick quotes online it looks like this might run us around 3k for the insurance. I generally have a strong aversion to insuring anything that couldn't break me if things went wrong, and while it would be a really big hit if somehow we bought the property and then suffered a complete loss due to some title claim, it would be less than a 20% hit to our net worth so it would be manageable.

Generally I try to self-insure or choose very high deductibles for most insurance, and from what I hear title insurance pay out less than 10% of the premiums in covered losses, so of all insurance that you should avoid if you can afford it, maybe title insurance is the best to avoid. However, that means I need to now do research to find a new attorney which does not have the same requirement, and hope they are good even though I don't have anyone to provide a local referral. Maybe I'm just being too cheap and should just pay the 3k and avoid one more hassle in life.

I'm curious what others think about this scenario. Would you avoid title insurance if you could afford to suffer a total loss of the property?
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anon_investor
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by anon_investor »

aws wrote: Thu Jul 22, 2021 8:20 pm We are closing on a new house purchase in two weeks. Our realtor referred us to an attorney that he liked which we may engage to do the title search and closing, but in the welcome letter from her she said she requires all buyers to purchase owner's title insurance if they are paying cash, which we are. From some quick quotes online it looks like this might run us around 3k for the insurance. I generally have a strong aversion to insuring anything that couldn't break me if things went wrong, and while it would be a really big hit if somehow we bought the property and then suffered a complete loss due to some title claim, it would be less than a 20% hit to our net worth so it would be manageable.

Generally I try to self-insure or choose very high deductibles for most insurance, and from what I hear title insurance pay out less than 10% of the premiums in covered losses, so of all insurance that you should avoid if you can afford it, maybe title insurance is the best to avoid. However, that means I need to now do research to find a new attorney which does not have the same requirement, and hope they are good even though I don't have anyone to provide a local referral. Maybe I'm just being too cheap and should just pay the 3k and avoid one more hassle in life.

I'm curious what others think about this scenario. Would you avoid title insurance if you could afford to suffer a total loss of the property?
Many threads about this, just buy the title insurance. It is a rip off, but stupid not to get it.
brian91480
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by brian91480 »

I bought a house last month... Cash purchase.. had a title search done... came up clean... and I declined title insurance. I saved a thousand dollars and I'm not losing any sleep over it. 👍
simplextableau
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by simplextableau »

brian91480 wrote: Thu Jul 22, 2021 8:25 pm I bought a house last month... Cash purchase.. had a title search done... came up clean... and I declined title insurance. I saved a thousand dollars and I'm not losing any sleep over it. 👍
Of course the title search came up clean -- otherwise you wouldn't have closed. The problems arise later when something was missed.
Tortoise2030
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Tortoise2030 »

I probably would get the owner's policy. Local practice usually determines who pays the premium. Can you get the seller to pay for it? Or maybe split it?
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Mlm
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Mlm »

It was a long time ago but when I purchased my house for cash my attorney also said that I needed to purchase title insurance. I was surprised at how much it cost at the time. When I questioned him about why I needed the insurance he showed me local examples of native americans claiming land in the area. Since that time I have seen it happen. Don't cheap out and trust your attorney.
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BillWalters
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by BillWalters »

Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
adamthesmythe
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by adamthesmythe »

Depending on where you live you may be able to go without a lawyer. Now you've saved even more!

You hire a lawyer to give you advice. In this case he probably (1) is convinced title insurance is a good idea and (2) he doesn't want it coming back at him if things go bad.

I suppose you could shop for a more flexible lawyer who has less to lose.
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Harry Livermore
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Harry Livermore »

BillWalters wrote: Thu Jul 22, 2021 8:52 pm
Title insurers literally pay out like 1 cent per dollar in premiums.
...if that!
I agree 100% that it's the most opaque insurance "product" out there.
Having said that, I would never do without.
OP, a 20% permanent hit to your net worth is no big deal???
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delamer
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by delamer »

Do you think that if someone challenged your title to your home that the worst case scenario is just that you lose your equity?

It seems to me that the worst case scenario is that you pay a ton of legal fees to fight such a challenge. And then you still lose all your equity.

Title insurance covers legal fees related to claims, not just the value of the property.
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260chrisb
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by 260chrisb »

BillWalters wrote: Thu Jul 22, 2021 8:52 pm Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
These are all money grabs and generally unnecessary. Owners title insurance, lenders title insurance, title company fees to research the title. You're buying an insurance policy in the event the title company misses something! Isn't that what you pay the title company for in the first place?? What a rip off! Of course the lawyer will tell you it's mandatory. Is it? Do some research.
brian91480
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by brian91480 »

simplextableau wrote: Thu Jul 22, 2021 8:27 pm
brian91480 wrote: Thu Jul 22, 2021 8:25 pm I bought a house last month... Cash purchase.. had a title search done... came up clean... and I declined title insurance. I saved a thousand dollars and I'm not losing any sleep over it. 👍
Of course the title search came up clean -- otherwise you wouldn't have closed. The problems arise later when something was missed.
Not my first rodeo. I know many of the lawyers in my town... I know who's solid. Hiring a random attorney from a Google search would be more risky. I'll be fine. 👍
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jfn111
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by jfn111 »

simplextableau wrote: Thu Jul 22, 2021 8:27 pm
brian91480 wrote: Thu Jul 22, 2021 8:25 pm I bought a house last month... Cash purchase.. had a title search done... came up clean... and I declined title insurance. I saved a thousand dollars and I'm not losing any sleep over it. 👍
Of course the title search came up clean -- otherwise you wouldn't have closed. The problems arise later when something was missed.
+1
invest4
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by invest4 »

I have similarly negative perceptions about owner's title insurance. Alas, better to have it and not need it than need it and not have it. Of course, people will gamble (and most will be fine), but for those who roll "snake eyes"...the potential consequences can be severe.
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cchrissyy
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by cchrissyy »

I would consider the lawyer's guideline to be a positive sign that they are a responsible professional who gives solid advice even when they know though no prospective client enjoys paying another fee. I would find that reassuring as i proceeded to hire them and follow their recommendation. i suppose there are some times when you want to hire a lawyer who is willing to go out on a limb but i think when it comes to real estate purchases you should get a lawyer with a more conservative style.
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Joey Jo Jo Jr
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Joey Jo Jo Jr »

The closing attorney gets a healthy chunk of the premium. Did she disclose that? Usually bar rules require attorneys to disclose self interested transactions. I’m not sure how RE attorneys seem to get around that.
Joey Jo Jo Jr
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Joey Jo Jo Jr »

cchrissyy wrote: Thu Jul 22, 2021 9:33 pm I would consider the lawyer's guideline to be a positive sign that they are a responsible professional who gives solid advice even when they know though no prospective client enjoys paying another fee. I would find that reassuring as i proceeded to hire them and follow their recommendation. i suppose there are some times when you want to hire a lawyer who is willing to go out on a limb but i think when it comes to real estate purchases you should get a lawyer with a more conservative style.
If the lawyer thinks the insurance is so great, maybe she would be willing to forgo the 40% commission? No, the reality is that it’s just a hidden attorney fee. And the client is left unsure about whether it’s worthwhile or not because of the conflict of interest. Oh well, tis life.
Topic Author
aws
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by aws »

I am most put off by the fact she considers it mandatory, instead of just highly recommended, as it does seem like I'm buying insurance to cover the work she is doing.

But maybe I am thinking about the insurance wrong in considering the only value to be payouts on insured losses. Surely if title insurance provided no value and was pure profit to the insurance company, then competition would drive down the price to reasonable levels. So most of the premium probably goes to the cost of defending against meritless claims on the title, instead of actual valid loss payouts, but both are costs I would otherwise need to pay.

I will ask about if they are receiving any commission from the policy, as that would be a red flag for sure.
Mr. Rumples
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Mr. Rumples »

It depends on the state...in the last few decades in VA there have been several law suits where either the public records were simply wrong or court cases have affected the use of the land. More specifically, it regards King Grants claims which trace back as far as King Charles II usually involving riparian rights and property which is now, but which wasn't at one time, under water.* It can affect the ability of landowner to build if the new construction blocks access to the water; or where folks have the right to go on the property resulting in loss of privacy; the cases are more apt to involve land in the mountains, but not always. It such a touchy Issue that the Commonwealth's AG has not issued an opinion in some cases where the ownership of thousands of acres is in question. In VA, mineral rights normally transfer with the surface property, but not always; in CO mineral rights don't normally follow the sale of the surface land leading to some nasty surprises.

(Recent decisions have gone back to grants ranging from Charles II to George II and George III. Where I live in VA, the title insurance included zoning. My POA's house is a suburban lot, but its zoned agricultural; her lot and the next door lot have been zoned that way based on the grant from Charles II which the neighbor proudly displays; not knowing that would result in an ugly surprise should the neighbor decide to keep a cow or two or pigs on her little lot - all that's left now of thousands of acres.)
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rascott
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by rascott »

Are you skipping homeowners insurance too?
Luckywon
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Luckywon »

invest4 wrote: Thu Jul 22, 2021 9:28 pm I have similarly negative perceptions about owner's title insurance. Alas, better to have it and not need it than need it and not have it. Of course, people will gamble (and most will be fine), but for those who roll "snake eyes"...the potential consequences can be severe.
IMO the fact risk exists does not necessarily mean one must feel compelled to insure against it, especially when the insurance offered is actuarially perhaps the worst deal any person is presented with over their whole lifetime.

Every time we drive a car, or do almost anything, including possessing a home, we are subject to risk and severe consequences. Does everyone have an umbrella policy for $5 million? Is it foolhardy that doctors continue to practice, considering that each and every patient encounter could result in personal bankruptcy from a lawsuit above malpractice limits? Admittedly, I can't put numbers on these things, but I strongly suspect that declining title insurance is not the riskiest thing that most people do, or even in the top 50. That includes events that have low probability and high negative value, just like a serious adverse title claim.
BillWalters
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by BillWalters »

Iowa provides public title insurance and it costs like $100. Most real estate lawyers own title companies and get massive kickbacks. Pure corruption.
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F150HD
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by F150HD »

With some current societal trends, I'd be reluctant to not get owners title insurance.
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galawdawg
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by galawdawg »

BillWalters wrote: Thu Jul 22, 2021 10:24 pm Most real estate lawyers own title companies...
Not a real estate lawyer myself but I believe this assertion is untrue. Do you have any evidence to support your claim?
Northern Flicker
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Northern Flicker »

BillWalters wrote: Thu Jul 22, 2021 8:52 pm Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
I think the loss ratios are around 20%, i.e. 20 cents on every dollar of premium. Still very low. Part of the problem is overlapping coverage. You buy a property with a mortgage. Both you and the lender have a title insurance policy covering the same risks, there is no reduction in premium despite the fact that they can't both payout in full due to the double coverage. Refi a year later and you pay a full premium again for the lender's policy despite the incremental risk just being liens incurred on you during your year in the property.

Stay in the property 20 years, and if the property value doubles, the title insurance acquired at time of purchase still is only covering up to the original amount.
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Northern Flicker »

galawdawg wrote: Thu Jul 22, 2021 10:56 pm
BillWalters wrote: Thu Jul 22, 2021 10:24 pm Most real estate lawyers own title companies...
Not a real estate lawyer myself but I believe this assertion is untrue. Do you have any evidence to support your claim?
I think in areas where attorneys close transactions (much of the east coast of US) the attorneys often or at least sometimes act as brokers for title insurance. In many states out west, I think title/escrow companies broker it.
criticalmass
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by criticalmass »

aws wrote: Thu Jul 22, 2021 8:20 pm We are closing on a new house purchase in two weeks. Our realtor referred us to an attorney that he liked which we may engage to do the title search and closing, but in the welcome letter from her she said she requires all buyers to purchase owner's title insurance if they are paying cash, which we are. From some quick quotes online it looks like this might run us around 3k for the insurance.
Get a policy from a discount title insurance company, like Radian (TitleGenius/Entitle Direct) or RedFin's Title Forward. They can be significantly cheaper and don't pay big commissions to the attorney like others do. Will she still require title insurance as persuasively without a big commission?
Luckywon
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Luckywon »

Northern Flicker wrote: Thu Jul 22, 2021 11:30 pm
Stay in the property 20 years, and if the property value doubles, the title insurance acquired at time of purchase still is only covering up to the original amount.
That's a fascinating point. My home has increased in value greatly since I purchased it. Do I need to increase my title insurance? I'm being facetious as I have previously stated I would never purchase title insurance unless required. But does the rationale offered by those who state it is necessary in any real estate purchase similarly direct that additional title insurance should be purchased when the home increases substantially in value?
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grogu
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by grogu »

Northern Flicker wrote: Thu Jul 22, 2021 11:30 pm I think the loss ratios are around 20%, i.e. 20 cents on every dollar of premium.
Try 3.9%
https://www.ceicdata.com/en/united-stat ... ense-ratio
59Gibson
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by 59Gibson »

Northern Flicker wrote: Thu Jul 22, 2021 11:38 pm
galawdawg wrote: Thu Jul 22, 2021 10:56 pm
BillWalters wrote: Thu Jul 22, 2021 10:24 pm Most real estate lawyers own title companies...
Not a real estate lawyer myself but I believe this assertion is untrue. Do you have any evidence to support your claim?
I think in areas where attorneys close transactions (much of the east coast of US) the attorneys often or at least sometimes act as brokers for title insurance. In many states out west, I think title/escrow companies broker it.
It may not be "most" attorneys, but it's a very good chunk at least what I've seen in my area..btw Boston National Title has some of the lowest title search/closing fees around(they operate in most states) They'll do reissue policies- some title companies will claim to not be able to do reissues. All of the title companies are getting the policies thru 5 or so Underwriters. It should not be much of a price difference.
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by chazas »

59Gibson wrote: Fri Jul 23, 2021 6:28 am
Northern Flicker wrote: Thu Jul 22, 2021 11:38 pm
galawdawg wrote: Thu Jul 22, 2021 10:56 pm
BillWalters wrote: Thu Jul 22, 2021 10:24 pm Most real estate lawyers own title companies...
Not a real estate lawyer myself but I believe this assertion is untrue. Do you have any evidence to support your claim?
I think in areas where attorneys close transactions (much of the east coast of US) the attorneys often or at least sometimes act as brokers for title insurance. In many states out west, I think title/escrow companies broker it.
It may not be "most" attorneys, but it's a very good chunk at least what I've seen in my area..btw Boston National Title has some of the lowest title search/closing fees around(they operate in most states) They'll do reissue policies- some title companies will claim to not be able to do reissues. All of the title companies are getting the policies thru 5 or so Underwriters. It should not be much of a price difference.
People are only seeing a very limited universe of dirt lawyers. Not a fair assertion.
Pete3
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Pete3 »

criticalmass wrote: Thu Jul 22, 2021 11:45 pm
aws wrote: Thu Jul 22, 2021 8:20 pm We are closing on a new house purchase in two weeks. Our realtor referred us to an attorney that he liked which we may engage to do the title search and closing, but in the welcome letter from her she said she requires all buyers to purchase owner's title insurance if they are paying cash, which we are. From some quick quotes online it looks like this might run us around 3k for the insurance.
Get a policy from a discount title insurance company, like Radian (TitleGenius/Entitle Direct) or RedFin's Title Forward. They can be significantly cheaper and don't pay big commissions to the attorney like others do. Will she still require title insurance as persuasively without a big commission?
Love redfin so I checked out "RedFin's Title Forward" ... got to a web page that had a link to closing locations and it gave me a 404 error..... doesn't give me warm fuzzies

https://www.titleforward.com/services-reviews/ :
"Convenient settlement locations: Your closing will be quick, comfortable, and stress-free. We have a network of settlement locations that have Wi-Fi, snacks, and, in most cases, free parking. See our closing locations."
Dead link --- https://www.titleforward.com/locations/
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Sandi_k
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Sandi_k »

BillWalters wrote: Thu Jul 22, 2021 8:52 pm Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
It paid off for us.

We bought a house in 2011, from the husband. He and his wife split, so she filed a lien on the house, so she'd get her 50% when the house sold.

We bought with a 30 year mortgage, which we quickly refi'd out of - no problems. Five years later, we refi'd again, into a 15 yr - and the title search could not find the ex-wife's reconveyance deed for the sale of the house to us.

So I called the title insurance company, scanned a copy of our purchased title insurance into email, and they went to work. They pulled our 6 year old purchase file out of storage, and went through it. Nope. No signed off lien in the file. The county courthouse was pinged again, and a second search showed the initial lien, but no reconveyance.

So the title company tracked down the ex-wife (still alive, still somewhat local!) and she agreed to sign a new Release of Lien for the county.

That title policy saved us $300k.

It might not be required for new construction, but if I didn't get an Owners' Title Policy, I would surely require a Release of all Mechanic's Liens from the GC's company. What if he didn't pay the roofer? Embezzled the HVAC funds?
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grogu
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by grogu »

Sandi_k wrote: Fri Jul 23, 2021 5:07 pm
BillWalters wrote: Thu Jul 22, 2021 8:52 pm Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
That title policy saved us $300k.
Not quite. Your title insurer didn't pay a dime, except for the nominal cost of making a few phone calls and getting the wife to sign a release of lien--so MAYBE $1000 worth of time? Still probably less than what you paid for the cost of insurance.

Sure, your situation potentially could have materialized into a scenario where you could have been on the hook and the title insurer could have had to paid big bucks, but those situations are even rarer than the rare situation you had, where the insurer had to do some ministerial clean-up work (that you didn't even need a title company for) with no out-of-pocket damage done. I'm sure you were glad you had title insurance, but that still doesn't change the fact that on the aggregate, title insurance is a scam, where they pay out pennies on the dollar.
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Sandi_k
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Sandi_k »

grogu wrote: Fri Jul 23, 2021 5:28 pm
Sandi_k wrote: Fri Jul 23, 2021 5:07 pm
BillWalters wrote: Thu Jul 22, 2021 8:52 pm Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
That title policy saved us $300k.
Not quite. Your title insurer didn't pay a dime, except for the nominal cost of making a few phone calls and getting the wife to sign a release of lien--so MAYBE $1000 worth of time? Still probably less than what you paid for the cost of insurance.

Sure, your situation potentially could have materialized into a scenario where you could have been on the hook and the title insurer could have had to paid big bucks, but those situations are even rarer than the rare situation you had, where the insurer had to do some ministerial clean-up work (that you didn't even need a title company for) with no out-of-pocket damage done. I'm sure you were glad you had title insurance, but that still doesn't change the fact that on the aggregate, title insurance is a scam, where they pay out pennies on the dollar.
And if she had refused to sign the release the second time? She would technically have a right to that amount, based on her legally filed lien.

The price of an owners' title policy is insurance. For a new build, with the sketchiness of contractors and subs, I would happily pay to have that insurance.
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Luckywon »

Sandi_k wrote: Fri Jul 23, 2021 5:42 pm
And if she had refused to sign the release the second time? She would technically have a right to that amount, based on her legally filed lien.

Maybe she signed because she knew if she tried to collect on it she would most likely lose in court and might be countersued. In fact, she might be sued just for refusing to sign.
supalong52
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by supalong52 »

Penny wise, pound foolish to skip out on owner's title insurance. Although in our case, the seller paid for it.
BillWalters
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by BillWalters »

Of course there are (very rare) cases where the insurance has value. The issue is the price, which is usually fixed by the state, which is absurd. Again, Iowa does this publicly and title insurance costs like $100.
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by BolderBoy »

galawdawg wrote: Thu Jul 22, 2021 10:56 pm
BillWalters wrote: Thu Jul 22, 2021 10:24 pm Most real estate lawyers own title companies...
Not a real estate lawyer myself but I believe this assertion is untrue. Do you have any evidence to support your claim?
Let's turn this around. It is my understanding that most real estate title insurance companies are owned by lawyers. Is that not true?
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SSM1
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by SSM1 »

I just noticed this that attorney has ownership in closing company
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Normchad »

supalong52 wrote: Fri Jul 23, 2021 6:06 pm Penny wise, pound foolish to skip out on owner's title insurance. Although in our case, the seller paid for it.
+1. “I can pay cash for this house. Don’t want to pay 4K for Insurance though”.
BillWalters
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by BillWalters »

SSM1 wrote: Fri Jul 23, 2021 7:20 pm I just noticed this that attorney has ownership in closing company
Shocking. 40%+ of the premium is going straight into his pocket.
Northern Flicker
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Northern Flicker »

grogu wrote: Fri Jul 23, 2021 1:06 am
Northern Flicker wrote: Thu Jul 22, 2021 11:30 pm I think the loss ratios are around 20%, i.e. 20 cents on every dollar of premium.
Try 3.9%
https://www.ceicdata.com/en/united-stat ... ense-ratio
Those are expense ratios, not loss ratios. In 2011, the combined loss ratio for the 4 large title companies was neither 20% nor 3.9% but 11.8%.

https://www.naic.org/cipr_newsletter_ar ... urance.htm
Luckywon
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Luckywon »

Northern Flicker wrote: Fri Jul 23, 2021 8:04 pm
grogu wrote: Fri Jul 23, 2021 1:06 am
Northern Flicker wrote: Thu Jul 22, 2021 11:30 pm I think the loss ratios are around 20%, i.e. 20 cents on every dollar of premium.
Try 3.9%
https://www.ceicdata.com/en/united-stat ... ense-ratio
Those are expense ratios, not loss ratios. In 2011, the combined loss ratio for the 4 large title companies was neither 20% nor 3.9% but 11.8%.

https://www.naic.org/cipr_newsletter_ar ... urance.htm
This from NAIC states loss ratio for title insurance trended steadily down from 2014=7.8% to 2018=4.4%

https://www.naic.org/documents/topic_in ... report.pdf

This from CEIC states loss ratio for title insurance trended down from March 2012=8.5% to March 2021=2.3%

https://www.ceicdata.com/en/united-stat ... loss-ratio
Freetime76
Posts: 745
Joined: Wed Jun 26, 2019 8:26 pm

Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Freetime76 »

rascott wrote: Thu Jul 22, 2021 10:17 pm Are you skipping homeowners insurance too?
Very good question. This will save far more. Just get a liability policy.
Please spell out new acronyms. Thank you.
JTcheek
Posts: 63
Joined: Mon Aug 02, 2010 12:48 pm

Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by JTcheek »

Then you really don’t want homeowners insurance. At least you only pay title insurance once, homeowners insurance will cost you much more over time.
slidecreek
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by slidecreek »

I refused owners title insurance on my last house. They immediately offered to "reissue" the sellers policy for like $350, which I accepted.

Definitely a shady business, but it does offer a small amount of protection.
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unclescrooge
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by unclescrooge »

BillWalters wrote: Thu Jul 22, 2021 8:52 pm Biggest scam ever. Title insurers literally pay out like 1 cent per dollar in premiums. An absolute racket.
So invest in title companies. :mrgreen:
Northern Flicker
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Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by Northern Flicker »

slidecreek wrote: Fri Jul 23, 2021 9:42 pm I refused owners title insurance on my last house. They immediately offered to "reissue" the sellers policy for like $350, which I accepted.

Definitely a shady business, but it does offer a small amount of protection.
Where I live, the seller has to buy title insurance for the buyer, and I believe the premium is regulated by the state. It was 0.22% of insured value in my previous transaction. With no option to decline it, at least it can be chalked up to a required expense wherein it doesn't matter if you like it. If you sell a property, you pay for it. At least that satisfies the notion that it should be incumbent on the seller to provide a clean title.
invest4
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Joined: Wed Apr 24, 2019 2:19 am

Re: Owner's title insurance for cash purchase - lawyer says mandatory

Post by invest4 »

Some additional comments from a previous post for interest:

viewtopic.php?t=303195

slidecreek wrote: Fri Jul 23, 2021 9:42 pm I refused owners title insurance on my last house. They immediately offered to "reissue" the sellers policy for like $350, which I accepted.
criticalmass wrote: Thu Jul 22, 2021 11:45 pm Get a policy from a discount title insurance company, like Radian (TitleGenius/Entitle Direct) or RedFin's Title Forward. They can be significantly cheaper and don't pay big commissions to the attorney like others do. Will she still require title insurance as persuasively without a big commission?
Had never considered these potential alternatives. I utilized Radian for my last refinance...also recommend.
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