As with any insurance, it's easy to say title insurance isn't necessary… until you have a reason to need it. I am currently working with sellers getting ready to close tomorrow… this is one of those instances where title insurance woulda made things much easier.
If you have a mortgage, you can't buy a home without buying title insurance for your lender… adding a rider to protect yourself as well is additional. It's usually much less for the rider, often only a few hundred dollars for protection as long as you own the property.
If you need it, you'll likely learn about it shortly before closing, when the title search is completed prior to sale. That's what just happened to one of my clients. Their sale is supposed to close tomorrow, but an unsatisfied mortgage from the previous owner showed up on the title search. It seems likely that the mortgage is really closed and paid off, but the satisfication wasn't recorded properly so closing can't take place until it is cleared.
With an owner's title insurance policy it would be easy… we would just close and the title insurance company would take care of it. Without the insurance, it is up to the seller to get it cleared before closing. Let's hope we can manage to get it cleared today so we can close tomorrow!
Sharlene Hensrud, RE/MAX Results – Email – Twin Cities Realtor
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