Is Title Insurance really necessary on resale?

[GB]

Trying to save my buyer some money on closing costs. I, the seller, have the original title and since I still have a DVC loan on this contract, their could'nt be another lien on the property. Maintenence fees and taxes are payed on a monthly basis.

What do all of you experts recommend. Yes or No for Title Insurance?

Gina

 

[WebmasterDoc]

I can think of several reasons there could be lien on your title (divorce, bankruptcy, etc) and I would always suggest the BUYER get the title insurance- just for the peace of mind, if for no other resason. I know some here would be very comfortable saving a few $$ by foregoing the insurance, but I'd never suggest that a buyer go it alone.

If you really want to save them some money - just lower your price!

 

[Disney1fan2002]

Couldn't there also be a chance that the seller is working with 2 different brokers, and get 2 buyers? I heard a nightmare story like that when I was closing on my house. That is why they do a title search.

 

[GB]

Okay thanks for your responses. I am single, never been married, and have never filed bankrupt. I also am not going thru a broker, I am selling on my own. The title company charges an extra $300 for title insurance - does the buyer get any of that back. Sounds pretty expensive. I just know that I am an honest person, but of course my buyer wouldn't know that. It is completely up to the buyer if they want to purchase title insurance - just wanted to know what most people think.

 

[JandD Mom]

I echo what's been said, and as a buyer of a DVC resale, I insisted on title insurance. Buying DVC or any other timeshare is a transfer of real estate just like transfer of your home. Real estate can be encumbered in many ways you cannot think of (whether the buyer is honest or dishonest). Having title insurance protects all parties from unexpected (or expected) suprises.

 

[GB]

Thanks for yor response. If I was the buyer, I would probably get it also. Both of placed this question on two different boards to see what responses we would get. I'll let her know what you all think. Does anyone know what estoppel stands for?

 

[WebmasterDoc]

...Does anyone know what estoppel stands for?

ESTOPPEL - (estopped) A bar which precludes someone from denying the truth of a fact which has been determined in an official proceeding or by an authoritative body. An estopple arises when someone has done some act which the policy of the law will not permit her to deny.

In certain situations, the law refuses to allow a person to deny facts when another person has relied on and acted in accordance with the facts on the basis of the first person's behavior.

 

[GB]

Wow! Now can you tell me again using english? Tee Hee. After reading this very slow and word for word twice, I guess that it means the closing company is going to check out my title, my deed, talk to DVC to make sure I own, point availability, and am current on dues, and that my payments are current. Otherwise, if I have falsified any information they would have the right to prosecute me.

Did I sum that up correctly, cause it was a little hard to digest. Tee Hee!

 

[WebmasterCricket]

In plain English it means that one party can't say something to cause the other party to act differently due to what was said and then turn around and revert back to something that acts upon the first thing said.

I didn't say it was going to be proper English did I

e.g. a seller can't say "I will only charge you for 50% of this years dues" and then try to collect on the other 50% later on. The seller would be "estopped" from doing so.

I'm sure it's more complicated than that, but that's about it.

 

[WebmasterCricket]

I also know it has something to do with agent representation too but I don't know exactly how.

 

[malibuconlee]

From the Modern Real Estate Practice book for the national exams.

Estoppel:
method of creating an agency relationship in which someone states incorrectly that another person is his or her agent and a third person relies on that representation

Estoppel certificate:
A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.

 

[JimMIA]

Is Title Insurance really necessary on resale?

Yes.

 

[JimC]

Yes, the buyer should obtain title insurance.

 

[jctwizzer]

Is Title Insurance really necessary on resale?

Yes.

Not really. And that came from the company that handled the closing for a couple smaller add ons we made. We skipped the title insurance, and there have been zero problems. On a large real estate purchase, it would be prudent (not to mention necessary for the lender's peace of mind), but if you're willing to go without it on a smaller purchase, it's no big deal. Primarily what you're comfortable with--and that may be the key. Personally, I have no trouble sleeping without it. JMHO

 

[mousefansmom]

We were talked out of it too- No problems, but it made me very nervous until the sale went through.
Mousefansmom

Not really. And that came from the company that handled the closing for a couple smaller add ons we made. We skipped the title insurance, and there have been zero problems. On a large real estate purchase, it would be prudent (not to mention necessary for the lender's peace of mind), but if you're willing to go without it on a smaller purchase, it's no big deal. Primarily what you're comfortable with--and that may be the key. Personally, I have no trouble sleeping without it. JMHO

 

[T.E. Yeary]

Title Insurance, Life Insurance, Disability Insurance, Car Insurance, Household Insurance, do we have to have it? NO, but when we finally realize we should have gotten it, it's too late. The damage has been done!

Tom

 

[CarolMN]

It really boils down to how much risk the buyer is willing to assume. For me, spending a few hundred to protect several thousand is well worth it. I might take a chance on a very small contract, especially if there had been only one owner.

If you are willing to take the risk of losing your contract later due to not having a good title (or being unable to sell it later because you don't have a good title), then title insurance is not necessary. The risk increases with the number of times the contract changes hands increases.

In the end, it is the buyer's decision - FWIW, if a buyer suggested I not get title insurance, I'd almost certainly look for another contract. That just seems very odd to me (unless I were buying fro a very good friend or close family member), LOL.

Best wishes-

 

[Johnnie Fedora]

We decided not to do this on a resale we purchased at HH. I believe the cost for this was around $1000 dollars. Costs were higher for SC than FL transactions. Does that sound correct to all? Also, does it make any difference that Disney owns the property?

 

[CarolMN]

$1000 for just title insurance sounds like a lot to me - could this amount have included all the closing fees, too?

Best wishes-

 

[DBBN]

The title company charges an extra $300 for title insurance - does the buyer get any of that back. Sounds pretty expensive. I just know that I am an honest person, but of course my buyer wouldn't know that. It is completely up to the buyer if they want to purchase title insurance - just wanted to know what most people think.

No title insurance is not required. If I was the seller I would make no recommendation one way or the other as to whether the buyer should purchase title insurance. The buyer can and should seek guidance from the closing company as it relates to title insurance.

The $300 premium quoted seems quite expensive (unless you're selling a very large number of points). In 2004 I purchased 2 resales (300 points each at OKW) and looking at closing documents the premium for title insurance was .00575% of the purchase price. The premium for a purchase price of $20,000 would be $115.00. To reach a $300 premium the purchase price would have to be over $52,000. Of course the premium might have changed since last year but I wouldn't expect much of an increase.

If I was the seller - I'd make no recommendation.
If I was the buyer - I would buy the insurance.

Good luck with your sale.