What If I Don't Get Title Insurance?

By
Real Estate Agent with Century 21 Trademark Realty

In Maryland, title insurance consists of lender’s title insurance and owner’s title insurance.  The lender’s portion is mandatory in order for the bank to approve your loan.  The owner’s portions of the title insurance is optional.  The purpose of the title search is to disclose title problems, take appropriate action to clear the records and enable the transaction to be closed.

 

In spite of all the work that goes into a search and examination of a title, hidden issues can emerge after completion of a real estate purchase which can lead to additional costs.  For example,

  • A forged deed that transfer no title to real estate,
  • Mistakes in the public records
  • Previously undisclosed heirs with claims against the property
  • Instruments executed under expired or fabricated power of attorney
 Owners could lose their homes or equity or delay a home sale without owner’s coverage.  Title insurance will protect you.  If a claim arises, your title insurance company will defend against its consequences, paying the claim and legal fees to defend your ownership.

 

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Anonymous
Indu Das

I dont think is an insurance absolutely must to have. If you planning to stay in the house for 1-4  years and dont' think you will accumulate much stake by then, i would simply skip this insurance.

Of course, stuff happens but the big qs is how much you have invested in and what are the chances. Do you really want to pay $1000-$3000 to protect say 10-20K stake in the house and that too with only <5% (that's what the title insurance company paid out last year) chances of your title being compromised ?! And dont' forget you already pay for title search anyways which should have found out any discrepancies in the title.

On searching of answers to such posts online, what i am finding is its mostly realtors/agents etc who answered such qs. No wonder they project its a "must have" service. Guess who gets the commission from your title and insurance companies ?!

 

Jun 17, 2010 02:52 AM #1
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Rainer
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Cheronn Collins

Silver Spring Real Estate
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