There was a ghost at one of my recent closings. Not an actual ghost, but someone who had died 60 years ago was very present at the closing table. When he died, his wife inherited the house and later sold it. This sounds fairly typical, correct? It was, except that wife had not filed any probate documents related to his death.
What does mean? Potentially, if left issue unresolved, there could be a problem with the Title when the (current) buyer tries to sell the property. For that reason, I strongly recommended to my client that he should get Buyer’s Title Insurance.
Buyer often ask, “Do I really need that?” Don’t tell anyone, but before I started doing real estate closings, I may have thought no. Why would I want to spend even more money than I’m already spending on this house? Shouldn’t I be putting that money towards a new set of plush towels and paint?
My answer is very different now. Reviewing titles regularly, I realize how easily there can be a issue with a title; it doesn’t have to be big, something like a missing death certificate or an old lien, can either delay or stop a house from being sold or bought.
Is Title insurance worth the investment? Yes, yes, yes. Sometimes the risk obvious, like the friendly ghost in the story above; other times, it is not as easily resolved and significant expense can be involved.
The one-time expense for Title Insurance is usually minimal, especially considering the overall cost of buying a house. On an average house, the cost of a policy is equal to two or three hours of legal services. Without insurance, the cost of correcting or litigating a Title dispute could easily cost thousands or tens of thousands of dollars.
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