 | Jeff Otto is Branch Manager of Lawyers Title Insurance Corporation which is a member of LandAmerica Financial Group, Inc., a premier national provider of title insurance and settlement services. Lawyers Title has been in the local marketplace since 1955. Jeff has been with Lawyers Title for 34 years, the last 24 right here in Wichita. You may contact Jeff at (316) 682-9600 x 201 or by e-mail at jotto@landam.com |
Real Estate
1969-12-31 18:00:00
Do I need title insurance on FSBO?
: I'm Not Sure I Need To Buy A Title Insurance Policy On My FSBO Purchase…Do I?
ANSWER: When Jack and Alice bought their dream home with a big privacy fenced, wooded back yard and pool, they thought the title was free and clear. The seller had told them so. The home was being offered "For Sale By Owner", (FSBO) and they were told by the seller that he had priced the home really "low" because he had no real estate commission to pay, and they were getting a good deal. They signed a contract to buy the home, and closed the sale. But the next year, when their neighbor decided to sell his home, a survey was performed, and that survey showed he owned half the land under Eric and Jill's backyard pool. Think it can't happen? Be assured, it can! Jack and Alice had to buy back the land that they thought they already owned when they purchased their "dream home". Jack and Alice had not purchased a Title Insurance policy to protect them from nightmares such as this. Fred and Doris lost their dream home completely when it was discovered that the seller had forged his wife's name on the title documents he signed at closing during their less than friendly divorce. Fred and Doris were not protected by a Title Insurance policy, which would have made them whole as soon as this situation revealed itself.Ryan and Whitney were forced to give up a huge chunk of their front yard a few months after moving into their new home when there was discovered an undisclosed road expansion easement. It's very likely that the easement for future road expansion was filed of record and would have been revealed in a title search…which would have given them advance notice about this important item of information. The only problem was that a Title Insurance Policy was not purchased.If you're paying attention, you can see a pattern here. You are free to do as you wish on home purchases that involve no lender…but a lender is more than likely going to require a title policy to be provided before allowing the loan to close. If you do not purchase a Title Insurance policy, you're taking a huge risk of the loss of most people's biggest single financial asset in their lives. Is it worth taking that risk yourself? I think not…If you have a title policy, and there is ever a challenge to your ownership position, you will be defended free of charge by the Title Insurance company against any and all covered claims against you and your property, and the insurer will pay up to the policy amount to settle those claims, freeing your title from liens, encumbrances, and other clouds that may be on your title. More next month…
