Everything you read indicates when buying a property purchasing title insurance is a wise move.

Scenario is I'm buying a completed new home from a national builder in a well established master planned community.

I'm not seeing the risk in not having title insurance in this situation.

Am I missing something? Not huge bucks involved but enough for me to think about the expenditure versus the small risk in this situation of there being some type of unknown claim on the property.

RoyVal said:

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your lender will require it. Title insurance also covers the land. The land the home is built on probably has been owned by multiple people over the years.

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Thanks. Forgot to mention there will be no lender involved.

It's still a risk but a pretty low risk. If the builder will pay then no brainer. Large housing corporations usually won't pay but in this slow market they might.

I'd skip it since you will pay for a policy when you or beneficiaries will.

If you had any idea how cheaply and poorly a lot of development title work is done this wouldn't be a question.

In just the last 6 months I've seen a proposed development layout that ignored a 20-inch petroleum pipeline running diagonally through the project, a custom home and detached 4 car garage with a 12-inch pipeline under both of them, and a number of ALTA surveys that improperly showed easements as "blanket type" that were in fact described by meetes and bounds (one of them went through a multifamily structure.

The risk is low-ish, the price is low, the potential ramifications can be huge.

So I am just curious.

Are you planning on researching title yourself or just assuming the builder did a good job on the parent tract?

knoxtom said:

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So I am just curious.

Are you planning on researching title yourself or just assuming the builder did a good job on the parent tract?

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I'm not competent enough on this to do my own research, so was trusting a good job has been done to date given this is a 4,000 home master planned community about 75% built out. Additionally, it's a new home with the only previous owner being a national builder.

If this was a smaller community not started by a national developer and the home had previous owners, obviously title insurance would be a no-brainer. Given the circumstances detailed above I thought it a fair question if the risk warrants a 4K check.

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Given the circumstances detailed above I thought it a fair question if the risk warrants a 4K check.

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Risk never warrants insurance. Unless you need it.

Number of previous home owners is way down the list of concerns I have reviewing a full title report.

Name the development and let's see how many obvious PELS board rules violations we can find. Usually find at least 2 on recent plats I review. How well do you think those surveyors are doing at addressing complex title issues during development? You can email it to me if you don't want to post it normaleagle@gmail.com

Having litigated title insurance for a good stretch, the reputation of a national builder would be meaningless to me in whether I'd obtain title insurance or not. You never know what latent title defect is out there waiting to be uncovered regardless of who the prior owner was.

Thanks for the inputs all.....I appreciate the responses from people who obviously are very involved in these things.

Sounding like saving a few bucks on title insurance and using the money to fund my dream garage remodel would not be smart. Bummer....

I have no skin in the game, but I have bought/sold around 10 properties in my life and have made 3 title claims on separate houses. Two of which were very big settlements with respect to the property value.

I recommend asking for every endorsement they offer, especially the "shortages in area" coverage. Most of the endorsements are cheap, like 5% of the policy. Also ask to delete the arbitration provision. That is free and will help your lawyer if you ever need to make a claim.

Is the home purchase already contracted. If not, pretty typical for Seller to pay title policy. It should already be baked into their numbers so your offer needs to specify them paying title policy. But, in the end, not having a title policy is not worth the risk. Considering the size of home in question, this would especially be the case based on the overall investment amount.

Production builders typically don't pay the title policy cost.

I got your email and looked it up. Will respond more fully to the email.

That plat looks cleaner than most I've seen recently from a quality of work standpoint. I used to work for the outfit that did it (in a different office) and they're typically solid.

That said, the parent deed to that property has one of the longest lists of Permitted Exceptions (>130) that I've seen in quite some time. It would take a long, long time to go through all of that. BUY THE INSURANCE with all the bells and whistles as mentioned above.

Thanks all for the quality advice. I'm sold it's better safe than sorry on this.

p.s. -- I think I can still afford to trick out the garage : )