Is Title Insurance Really Necessary?
By Jim Palmer Jr.

Title companies are in the business of researching every possible issue that could relate to the ability to transfer a property by deed, and since they issue insurance from any claims or liens or defects (other than what they have disclosed on a written title policy), they are careful to list these defects upfront before the buyer signs on the dotted line.  Many do-it-yourself sellers and buyers make the unwise mistake of transferring real estate without first obtaining and carefully reviewing a title policy.   The unintended negative consequences usually come back to bite the purchaser many years later when they decide to sell.  Most people make this mistake simply because they want to save money, not realizing that the cost is well worth the benefit.  This isn’t a mistake you can afford to make! 

The cost of title insurance on a $300,000 sale is around $1,000.  That policy, usually paid for by the seller, insures the buyer against title defects for as long as they own the property without any further cost.  There is a one-time-fee at closing and unlike car insurance it can’t be canceled and has no monthly fee.  The reason the seller is typically saddled with the cost of such insurance is so that they can provide proof to the buyer that they are providing a marketable title.

Since purchasing a home or property is the largest investment most of us will ever make, assuring that you are purchasing something with an unblemished title is of utmost importance.  What if you opted not to receive the optional Owners Title Insurance Policy and you later find that a utility company has an easement across your back yard exactly where you were going to build that brand new shop?  Or, what if you later discovered that you have to share part of your property with someone who has the right to drive across your property to access their property?  Knowing that ahead of time may have deterred you from purchasing a property like that and would have saved you a lot of grief.  Title insurance assures peace of mind and freedom from worries of financial loss due to a defective or clouded title.

When difficult title issues crop up at point-of-sale, Realtors® and title companies regularly team up to resolve title glitches that threaten to sidetrack property transfers.  If you think your property may have an issue that could affect your ability to sell, contact your Realtor® and ask for help!