Working Title (Insurance)

You are paying for title insurance mostly to buy the expertise of a local title agent who knows how to look up things locally.

There is no national database that is up to date and trustworthy for this. To be even close to accurate, you need to check the source of truth for property deeds, transactions, liens.

You need to check various level of governments if taxes are up to date. If they are not, there may be an implied lien.

You need to check for financial judgements against the seller, which again may form an implied lien.

Divorces and similar issues mentioned in the article.

I am involved in an in-laws estate where a mom died without a will, a daughter was living in the house for free, and she and her husband had substantial judgements against them (hundreds of thousands of dollars). Resolution has involved the horrors of the surrogate’s court, multiple real estate lawyers, bankruptcy of the daughter, financial negotiations with her creditors and bankruptcy manager, surrogate administrator bonds, and repeated discussions with a bank holding a second mortgage against the property.

This has been ongoing for six years and is finally now almost resolved.

Most transactions will not have any of these problems. But you get title insurance - or run the check locally yourself, at least - because you have no idea who the seller really is and what they may have gotten into.

I'm inclined to disagree with this. One of those "not everyone doing it is up to no good, but everyone who is up to no good is definitely doing it" things. Obscuring ownership makes it a lot easier to evade the state in other matters.

The UK (and EU countries etc) has a register of "beneficial ownership" which attempts to untangle all such legal obfuscation efforts. https://www.ocorian.com/insights/understanding-uk-beneficial...

The rules in Hunterdon County, NJ are completely different from Detroit, MI and are different from Ossining, NY.

If you paid a guy in CA to run a title search in Hunterdon County, you’d be in a world of hurt. Because most of our records are at various Hall of Records. Even when computerized they are not on the Internet.

Even big places like Suffolk County, NY require a physical trip.

This is why the title agent gets nearly all the money. It is much more about the search than the actual insurance. As the author indicates, it is very rare for anyone to have to pay on a title insurance claim.

Or if they are beyond on their property taxes? Or going through a messy divorce? Or get an unexpected large medical bill that finalizes as a financial judgement against them?

Clean title from other owners tells you only a limited story. The current owners can completely trash the title but still have an existing mortgage.