A few days ago I received a phone call from a potential client who was buying a property for cash.\u00a0 These are my favorite kinds of transactions because you don’t have the additional complications that a bank brings to a closing.\u00a0 But the reason for his phone call was to express his frustrations with title insurance.<\/p>\n
One of his first statements was “I don’t need title insurance, because the title company issued a title commitment saying that they would insure the property, and I don’t want to pay for it.”\u00a0 We discussed purchase price, which was well over $300,000 and the one time cost of a title policy, which was $1,800.\u00a0 His main complaint was that he did not know that his real estate agent would direct him to a title company and that the title company could only close the transaction if they issued title insurance.\u00a0 He also knew that an attorney could close a transaction without title insurance.<\/p>\n
His rationale for not paying for the title insurance was that it was an easy transaction and he only needed an attorney to disburse funds.\u00a0 I explained to him that this was not a simple matter, that documents needed to be prepared and closing had to be conducted.\u00a0 Additionally, I explained that he would be foolish not to purchase a title policy and that most attorneys would not close a transaction without it.\u00a0 We also discussed liability and I told him my view – any attorney\u00a0who closes the transaction without title is taking on a huge liability, and unless that attorney\u00a0is fairly compensated for the liability he was not going to find a reputable attorney to close the transaction.<\/p>\n
As expected, I was not hired to close the transaction.\u00a0 But hopefully, the buyer is now a little better informed about the closing process and why he should want title insurance.<\/p>\n\n\n\n\n","protected":false},"excerpt":{"rendered":"
A few days ago I received a phone call from a potential client who was buying a property for cash.\u00a0 These are my favorite kinds of transactions because you don’t have the additional complications that a bank brings to a … Continue reading