The following is a true story that happened here in Charleston, SC --- if this can happen in Charleston, SC, it can happen anywhere:
There was a FSBO (for sale by Owner) sign on an ocean front lot on the Isle of Palms. Potential purchasers (we will call them, the Browns) called on the lot and discovered that they were only asking $500,000 when all other ocean front lots were going for pretty close to $1,000,000. The Browns got really excited- asked the "sellers" why it was being sold so low and the Browns were told that they had financial difficulty, so needed to dump the lot. The Browns wrote a cash offer to close quickly --- they did not want to miss the great opportunity.
The Browns selected an attorney to handle the closing for them. During the title search, a small red flag appeared and the title searcher sensed something wrong. The attorney had the police at the closing when the "sellers" walked in. The "sellers" were not the real owners of the lot. The actual owners of the lot lived out of town and knew nothing about this sale. By the way, the "sellers" had fake identification.
Now, had this attorney not sensed something wrong and had closed the deal, the buyers would have been out of $500,000. Also the buyers, if they had not purchased owner's title insurance, they would have been at a total loss. However, if they had purchased owner's title insurance, their investment would have been protected by the owner's title insurance.
As I have said, every purchaser needs owner's title insurance. If the purchasers are financing the property, the lender is going to require Lender's title insurance. I tell buyers all the time, "Hello!!! why do you think the lenders require title insurance?"
If the owner's title insurance is purchased at the same time as the lender's title insurance, there is a reduced fee for the purchaser (called a simultaneous issue)
For goodness sakes, all you Realtors® out there, be sure that your purchasers obtain owner's title insurance.
Will have another story for you tomorrow.
Liz Loadholt
Broker, SC Certified Trainer, Relocation Director Co-founder of AgentOwned Realty ]
Charleston, Johns Island, James Island, Mt. Pleasant, Isle of Palms, Sullivan's Island, Daniel Island, North Charleston, Summerville,Goose Creek, Moncks Corner, Santee, Manning, Sumter, Florence, & Myrtle Beach, all in South Carolina
Please visit my web site if you are shopping for Tulsa homes for sale in Midtown Tulsa OK or call 918-852-5036 if you need more information on Midtown Tulsa Real Estate.
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Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area and specializing in downtown Tulsa and midtown Tulsa real estate.
5 Comments
on Mama Liz Says - Why Do You Need Owner's Title Insurance?
AUG
16
2010
Good advice. When I meet a new client, one of the first things I do is check out their title profile. It shows who the owner of record of the property is.
GREAT video by Liz, for sure. In eight years of real estate, I've had one buyer refuse to purchase it. I made her sign a document stating that she made that decision AGAINST my recommendation!
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There was a FSBO (for sale by Owner) sign on an ocean front lot on the Isle of Palms. Potential purchasers (we will call them, the Browns) called on the lot and discovered that they were only asking $500,000 when all other ocean front lots were going for pretty close to $1,000,000. The Browns got really excited- asked the "sellers" why it was being sold so low and the Browns were told that they had financial difficulty, so needed to dump the lot. The Browns wrote a cash offer to close quickly --- they did not want to miss the great opportunity.
As I have said, every purchaser needs owner's title insurance. If the purchasers are financing the property, the lender is going to require Lender's title insurance. I tell buyers all the time, "Hello!!! why do you think the lenders require title insurance?"
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Good advice. When I meet a new client, one of the first things I do is check out their title profile. It shows who the owner of record of the property is.