Do we need Title Insurance when buying direct?

[Gizmo74]

Can you explain to me what Title Insurance does? I waived it but now having second thoughts. The CM I was just talking to said if I went to resell later down the line, I have to disclose that I don't have title insurance and it could be problems because new person won't be able to buy it. That doesn't make sense to me because when buying a house, you always buy title insurance to see who owns it. Do I need title insurance for later if reselling?

 

[Sandisw]

You don’t need it later to sell but if there was an issue, the title insurance takes care of it.

I think people have waived it with DVD because they figure that the developer has clean title to sell.

We opted to pay for it anyway because it would be our luck that it would be the first time something happens.

My guess could be that the CM meant if a title issue was found when selling it later on and you did not have it to begin with you could end up with an issue.

 

[Gizmo74]

You don’t need it later to sell but if there was an issue, the title insurance takes care of it.

I think people have waived it with DVD because they figure that the developer has clean title to sell.

We opted to pay for it anyway because it would be our luck that it would be the first time something happens.

My guess could be that the CM meant if a title issue was found when selling it later on and you did not have it to begin with you could end up with an issue.

Thanks for the quick reply. If I forgo title insurance on my purchase then I take the risk that the developer has sold me a clean title.

If/when I go to resell, the person buying from me would purchase their own title insurance to make sure what I am selling them is what they are buying.

I would think in that situation, the title company for the resell purchase would guarantee the title and if I had title insurance when I purchased would not come into play. Title insurance only comes into play when you make the purchase, right?

 

[Sandisw]

Thanks for the quick reply. If I forgo title insurance on my purchase then I take the risk that the developer has sold me a clean title.

If/when I go to resell, the person buying from me would purchase their own title insurance to make sure what I am selling them is what they are buying.

I would think in that situation, the title company for the resell purchase would guarantee the title and if I had title insurance when I purchased would not come into play. Title insurance only comes into play when you make the purchase, right?

I am not sure I know enough about but here is my understanding. Someone can clarify further.

When you sell, the title company does do a search for the buyer.

The title insurance the buyer gets protects them from anything that might have been missed during that search.

If, though, while they are reviewing title prior to the sale and find something, you’d have to fix it before they clear the title for the new buyer.

Basically, the buyer pays for the insurance to protect them from something discovered later in case it was missed during the initial title review.

The title insurance that you would be buying from your purchase is what would protect you from something discovered during the selling process.

Now, I get why people are more comfortable waiving with the developer and I am sure the chances of there being an issue are slim..but, as I said, we felt the $187 we paid last year for our two 150 point contracts was worth it, just in case.

 

[tom1944]

At $187 it is worth it

 

[CarolMN]

Title insurance would also protect you against clerical errors. Sometimes, getting those fixed after the fact can be a hassle.

It's really not expensive relative to the purchase price. IMO, it's worth it just for peace of mind.

 

[DonMacGregor]

Title insurance covers you against three major potential issues when it comes to deeded property:

1. You may be the first owner of the deeded property, but the developer bought the land from someone else at some point, and there could be liens against THAT unimproved land. With DVC in most instances, Disney has long held ownership of the property (DL, WDW), but the same can't be said for EVERY development (Aulani, VB, and HHI, for example).

2. Even as the first owner of the deeded property, there may be liens against the property filed by contractors and subcontractors retained by the developer/builder during construction.

3. To protect against errors made by the county clerk or recorder. Or, to protect against any errors when the development was subdivided (in the case of DVC, maybe those 150 points you bought at Aulani aren't actually .023547% of Unit 1E, like your deed claims they are).

 

[tom1944]

Title insurance is generally the most profitable line of insurance in the property/casualty category of insurance.

 

[Robbie Cottam]

You can always do your own title search….
But in all honesty,

It just a very small line item, if you are putting this much thought into if you should pay it or not….. maybe DVC isn’t a fit for you…

I totally under being financially responsible, but you are talking about a 20k to ???k purchase and haggling over a 200 dollar of insurance….

Have you heard about the farmer who put the cart before the horse ?

 

[thelionqueen]

You can always do your own title search….
But in all honesty,

It just a very small line item, if you are putting this much thought into if you should pay it or not….. maybe DVC isn’t a fit for you…

I totally under being financially responsible, but you are talking about a 20k to ???k purchase and haggling over a 200 dollar of insurance….

Have you heard about the farmer who put the cart before the horse ?

I respectfully disagree with this line of thinking. It is essentially "free money" for the insurance company which I am not akin to give away. Although I agree it is a small amount relative to the purchase price, that doesn't support throwing money away. I am positive Disney has taken care of all details and the chance of error is minute. Additionally, if there were an issue that may arise, you can almost certainly guarantee the insurance won't cover it as is the case with most claims lol. I am not getting it.

 

[tom1944]

I respectfully disagree with this line of thinking. It is essentially "free money" for the insurance company which I am not akin to give away. Although I agree it is a small amount relative to the purchase price, that doesn't support throwing money away. I am positive Disney has taken care of all details and the chance of error is minute. Additionally, if there were an issue that may arise, you can almost certainly guarantee the insurance won't cover it as is the case with most claims lol. I am not getting it.

The reason it is the most profitable line of insurance is because they hardly ever receive a request to pay a claim.

 

[Matty B13]

On the topic of buying Title Insurance for a home purchase, I recently was looking at a house and the current owners had a copy of a utility easement that was given by the original owners to a next door neighbor. However, this easement couldn't be found on the on-line search of the county records, probably because it wasn't scanned in but who knows. This house was only 20 years old, and all records should have been recorded and scanned on-line and properly recorded according to all property laws. We would have have never know about this easement if the current owners hadn't brought it to our attention and could have lead to a lawsuit from the neighbor if they wanted to use that easement which they currently were not using for a sewer hookup.

So I strongly suggest that even with newer homes that people protect themselves with Title Insurance for all property purchases, you never know what could happen even in a newer development and/or home.

 

[TAX GUY]

We opted to SKIP it this time. We bought it on the previous contracts, and for our current and past homes. Only once did we need it, which was our last home sale (two years ago). The prior sales had no title issues. This last house had a few quirks show up during the closing process. Our attorney asked if we bought a policy and if we had a copy of it. Luckily, we did, and what it did was pay for the attorney fees to clear the issues. Had we NOT bought a policy, we would have paid those attorney fees out of pocket. It's like any other insurance policy, you pay the premium and IF you need it, it covers *certain* costs/expenses. For what its worth, we are now in our fourth home, and had one title issue.

 

[Sandisw]

I respectfully disagree with this line of thinking. It is essentially "free money" for the insurance company which I am not akin to give away. Although I agree it is a small amount relative to the purchase price, that doesn't support throwing money away. I am positive Disney has taken care of all details and the chance of error is minute. Additionally, if there were an issue that may arise, you can almost certainly guarantee the insurance won't cover it as is the case with most claims lol. I am not getting it.

It's okay to feel differently, but for us, spending close to $54K on something and worrying about the $187 simply made no sense, even if the chances of it being needed were small.

It's a personal choice and no one right or wrong way to look at it..

 

[CarolMN]

I hope I NEVER to actually use any of the insurance policies I buy.

Unless I am willing to self insure (we self-insure most domestic travel), we buy insurance for peace of mind, as well as for financial protection. Even if we never have a claim for a fire or natural disaster, we still buy property insurance. I don't care one bit if we never have to make a claim on our auto insurance or liability policies. I am more than happy to pay an insurance company to assume those risks for me.

I strongly doubt that we will ever have to make a claim against the title insurance for our DVC contracts. But I know that if we do, I will be very glad to have it. I do NOT want the bother /hassle of dealing with attorneys and legal issues, not to mention the expense. For me, the cost to protect thousands is relatively small and worth it.

Obviously, YMMV. We all have different tolerances for risk.

 

[Robbie Cottam]

I respectfully disagree with this line of thinking. It is essentially "free money" for the insurance company which I am not akin to give away. Although I agree it is a small amount relative to the purchase price, that doesn't support throwing money away. I am positive Disney has taken care of all details and the chance of error is minute. Additionally, if there were an issue that may arise, you can almost certainly guarantee the insurance won't cover it as is the case with most claims lol. I am not getting it.

Once of prevention or pound of cure….

We can agree to disagree

 

[sndral]

I purchased title insurance for my resale contracts but not the direct contract. My thinking was; direct = first deed from a large company if there’s an issue I can find them & they’ll likely correct the issue w/out a need for me to litigate. This is a leasehold which at the end of the lease will have 0 title to fuss about. The amount involved is a 5 figure transaction - roughly the same as a mid priced new vehicle or a big home repair bill, did I get title insurance on my house, a fee simple w/ a much higher value - yes, but for a 5 figure leasehold w/ a specific end date I was comfortable waiving title insurance.

 

[Genie+]

We all have different tolerances for risk.

Totally. $187 is a relatively small price to pay for direct purchasers who like 100% peace of mind.

Personally we deal with alot of risk so something of low likelihood popping up down the line costing us $1 or $2k didn’t bother me enough to buy it. We proofread our documents. At worst I feel like there’s enough meat on this 150 VGF direct that even some weird extra cost down the line is absorbable. C'est la vie. DVC has a very good track record. The biggest issue so far? Subsidized VB and AUL dues, and I’m not aware of Title Insurance playing any part to rectify.

I would not have this confidence with resale or home purchase.

 

[rubybutt]

Would you give a stranger $200 just because you spent $45,000? Just because it isn't that much? Every purchase should be weighed for its benefits. If you have to use the title insurance with a direct purchase, A LOT has to have gone wrong that Disney won't correct themselves. Has ANYONE here EVER used their title insurance with a direct purchase? Serious question.

 

[Robbie Cottam]

Would you give a stranger $200 just because you spent $45,000? Just because it isn't that much? Every purchase should be weighed for its benefits. If you have to use the title insurance with a direct purchase, A LOT has to have gone wrong that Disney won't correct themselves. Has ANYONE here EVER used their title insurance with a direct purchase? Serious question.

If that stranger was contractually obligated to give me 45,000 dollars back if ANY title issues came up, ever.

Then yes