61–70 of 99 posts
I always thought of title insurance as a complete farce. However, I did end up with a scenario where title insurance paid out (to me) to the tune of several thousand dollars when I was sued by a neighbor. The neighbor accused me of infringing on her property. I, in turn, proved (enough to the title insurance company, anyway) that the neighbor had also infringed on my property, and had done so in an invisible way (und…
Earlier quoted context omitted.
The US approach is probably better. People have a very strong urge to centralise all power and knowledge in one centralised body but that is bad strategy. (1) Powerful centralised bodies usually end in disaster. If they get strong enough, they revert to groupthink and start breaking things. (2) Governments don't have enough bandwidth to deal with all this stuff. If the government is handling 10 critical services badl…
The proper US answer shouldn't be federal centralisation, but centralsation per state. That should avoid to worst centralisation issues and have clear benefits. And it clearly works in other countries that are smaller or bigger than individual states: it works in New Zealand (similar to Oregon) and Australia (about 30 million people, though I don't know if their registry is federally centralised) for example.
My real introduction to Title Insurance came not when I purchased my first house, but as I sold it. The buyer was an experienced builder who was buying the house (in a fairly desirable area of the city where property was appreciating quickly) in order to add upgrades and flip it. When his agent asked why he had crossed out the line for title insurance, he retorted, "that property's been sold three times in 10 years.…
He also was probably not financing the purchase with a mortgage.
My real introduction to Title Insurance came not when I purchased my first house, but as I sold it. The buyer was an experienced builder who was buying the house (in a fairly desirable area of the city where property was appreciating quickly) in order to add upgrades and flip it. When his agent asked why he had crossed out the line for title insurance, he retorted, "that property's been sold three times in 10 years.…
So it would be better from this perspective to not have much buying & selling, as long as the most recent owner is trustworthy & has used the property for the past 7.5 years.
Earlier quoted context omitted.
The question is also who will be left holding the bag. If title searches over the past 10 years have turned up nothing problematic, then likely when the flipper sells, their buyer's title search won't turn up anything either. And once their eventual buyer buys the house, it's their problem (not the flipper's) -- well, their title insurer's problem -- if a title dispute comes up later. And given that the flipper's goa…
The flipper will be left holding the bag. The 10 years of prior searches won’t help you if the last owner snubbed a contractor and had a lien slapped on the house. Or a number of other scenarios. The title company won’t issue the insurance if it finds issues like this. It will issue a list of items to clear before they will issue the insurance. It is generally up to the owner (eg the flipper) to cure the issues.
If something has a high level of importance in your finances or for other reasons, it makes sense to buy insurance. If you can handle the risk yourself (typically because the investment is not a terribly large amount of your total investments, and you do not think risk for this investment is correlated with risk to your other investments), then it doesn't make sense to buy insurance.
House flippers could be anything from very small one-person operations who would be wiped out if they had to clear a lien, to fairly large operations who can absorb the occasional risk into their costs of doing business.
A surprising law foundation in the US is that if you live somewhere long enough as if you were the owner, then it becomes yours. Sometimes known as "squatters rights". This feels a bit unfair at first. However, this "if you think you own it, you probably do own it" has turned out fairly well. At least in most places in the US, unlike England, you don't have to trace all property transfers back to Norman Conquest in 1…
As a practical matter I think this mostly confuses adverse tenancy with adverse possession. The latter case, of squatters gaining full legal title to a piece of property, is extraordinarily rare, and as I understand it the cases all tend to be marginal (like: abutments of adjacent rural properties changing hands). Adverse tenancy is somewhat more common: you can establish through your actions an expectation that you'…
Okay, so Bob owns a house. Bob marries Jane in an ill-advised, quickly ignored ceremony, but never gets formally divorced. Bob sells his house (in a community property state) to Ted. Ted lives in the house for 20 years. Jane dies. Jane's son Rick goes through her stuff, realizes that she was still married to Bob, realizes that Jane had a legitimate claim on the house that Ted has been living in for 20 years.
This is a classic adverse possession situation. Ted has been openly and notoriously living in this house, acting as owner. If Rick presses his claim, it is likely that Ted can win an adverse possession claim (assuming that Ted lives in a place where adverse possession still works the way it basically did in common law).
I am not a lawyer, this is not legal advice.
Earlier quoted context omitted.
The nature of the scam is not from title insurance being unnecessary, but title insurance not being purchased on an open market like other insurance products. It's added in to the contract, with financial benefit to the real estate agent, and not discussed. The author's point about real estate being one-shot for the buyer and seller is spot-on.
I disagree. Title insurance requires highly localized specialty agents from the municipality up to the county to the State to Federal. 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 comput…
My real introduction to Title Insurance came not when I purchased my first house, but as I sold it. The buyer was an experienced builder who was buying the house (in a fairly desirable area of the city where property was appreciating quickly) in order to add upgrades and flip it. When his agent asked why he had crossed out the line for title insurance, he retorted, "that property's been sold three times in 10 years.…
Obviously therefore I don't need the insurance: in the very unlikely case title might be challenged I can always just sue the policy of the (now deceased) people who sold the house to me.
The title company of course did not like this. More importantly: they were the one conveying the title (a lawyer doesn't do this as happens in some other states). They said "we earn our money on this and if you don't buy the insurance we won't convey the title" (i.e. complete the change of ownership). And at least around here in Palo Alto only the title insurance companies handle this, at least according to my real estate attorney.
So basically I was required to pay an extra few hundred bucks for nothing. A true "junk fee".
A surprising law foundation in the US is that if you live somewhere long enough as if you were the owner, then it becomes yours. Sometimes known as "squatters rights". This feels a bit unfair at first. However, this "if you think you own it, you probably do own it" has turned out fairly well. At least in most places in the US, unlike England, you don't have to trace all property transfers back to Norman Conquest in 1…
However, since this is New Mexico, and even the idea of formal record keeping here is, cough, rather recent, I only had to go back to 1980 for the purposes of the permit
:)