Title Insurance

If you can afford to buy all cash, wouldn't it make sense for you to zero out risk by spending a few dollars on title insurance?

Anyone worried about this small amount is clearly in over his head.

I used to buy title insurance even on coops, but I was dealing mostly with foreclosures.

I was victimized by a real estate developer who I was funding for various development deals throughout long island. He was great for several years and there was no reason to continue getting title insurance for these short term (2 years or less) projects that started out as mortgages for land purchase. Well he or his attorney partner forged my brother's signature on a title transfer to get a bank to give him a new mortgage on the land and the building of a specific property and then the Lehman collapse happened knocking down his house of cards. He ended up in jail , his partner disbarred, and I spent 7 years fighting against a bank and their title company getting my money back. If I had insurance, the outcome would have been the same less the 7 years. Granted manhattan condos and co-ops are different but in today's climate with inundated courts and fickle judges, I'd weigh risk / rewards more conservatively. Academically one can argue who wins and loses, but in reality no one factors in the length of time and expense it can take to get a resolution. Title insurance will reduce that time by 80%, the expense by 99%.

There are all kinds of fraud scenarios, on a manhattan condo, I could envision a divorcing couple where one sells without the other's permission, even forging a power of a attorney, or a mistress apartment where the sugar daddy owns it and the mistress claims she owns it. I know, Im reaching. Its fair to ask what actual cases have actually been brought to claim.

Thank you. My attorney told me that I will have trouble selling as the buyer's title insurance may refuse to insure. That means no escape.

In my experience as a lender, title insurance policies are notorious for their carve-outs which limit the ability to collect on the policy. But if cheap, still makes sense to buy one for whatever it may get you. Maybe its better to deal with certain issues in the contract of sale?

" I know, Im reaching"
Considering it's actually occurred it's not that much of a reach. I know there was a case (can't remember the caption) where a couple was getting divorced, the husband sold their apartment and brought his mistress to the closing to sign his wife's signature. The managing agent who executed the transfer got sued and lost (I think it was Douglass Elliman but not sure).

My question is, why is title insurance so expensive still? Seems like a commodity product, why hasn't it been disrupted yet?

If there's no mortgage, you don't need the lenders policy part (mortgage loan) of the insurance.

JR1: How much *should* title insurance cost? $100? $500? $1000? It's a one time cost, 'amortizable' over the full period you own the property, and, from the purchasers point of view, it is a commodity product for the vast majority of sales (i.e., something other than foreclosure, tax sale, complicated land configurations, etc.). Other than the profit structure, what do you propose disrupting about the product?

Title insurance is one of the biggest scams in our industry due to the carve outs. However, I do not see a way around them. Mercer, I understand where your question originates from as I have considered the topic myself. However, there is no way around them - we must get title insurance.

Aaron2, I'm just surprised that the prices are still so high even though prices are regulated and basically there's no differentiation on price:

https://www.hauseit.com/what-is-title-insurance-nyc/

And yes, $500 is much more reasonable. It is amortized but what if you flip a year later?

https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/ <-- you'll see the estimate on this one is around 45 bps ... quite a hefty closing cost all things considered