Realtors are used to taking every contract into their favorite title company, opening title, and, in a few weeks, coming to the closing table and collecting a nice commission check. This is the process, and its a good one. But on occasion, this process is halted, there is no trip to the closing table, and no commission check. Sometimes, you see, title is not insurable.
Recently, a Realtor came into our office to see if we could close a contract that had been returned to her by her regular title company. After weeks in the hands of this other title company, preceded by months of gutbusting work by this Realtor in getting this contract, the decision had finally been made that title to this particular property was currently not insurable. The call was made by the closer to the Realtor. The bad news was delivered. The contract was returned. There would be no closing. There would be no nice commission check.
Now this Realtor comes to our title company, looking for a miracle. The hope was that her regular company had been wrong, and that we could close the deal, despite its many problems. But, after hearing the scenario (this one involved a convoluted set of facts revolving around a Constable’s Deed, a sale on the courthouse steps, a writ of execution, a judgement lien, and, critically, an apparent failure to notify the first lienholder about all this) we had to concur with the decision reached at the other title company. This title was not currently insurable.
Of course, this was not the answer this Realtor wanted to hear, and, for that matter, it was not the answer we wanted to give. After all, if we can’t insure title, we cannot collect a title insurance premium, and, thus, we can’t get paid. And we, like the Realtor, are in business to make money. But, the answer was the answer. It is what it is, as they say. This was simply one of those relatively rare cases in which title insurance cannot be issued.
That title might be uninsurable seemed to come as a surprise to the Realtor. But it should not. Title companies only issue policies when due diligence assures them that the risks are acceptable. If every title was insurable, there would be no need for title insurance.
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