Owner's Title Policy - Is this needed???

I'm buying a brand new constructed home in Stonegate and was wondering if I needed to buy an Owner's Title Policy.  Is this really necessary?  It is costing me nearly $1100.  Was wondering what others are doing.  Thanks. 

I don't think you can opt out anyhow.  It's mostly a scam but this may give you a warm fuzzy:http://www.nolo.com/legal-encyclopedia/title-insurance-buyer-needs-36126.html

Edit: you can probably opt out if you're an all cash buyer but otherwise you're stuck as the lender will require it and bundle it with your closing.  Are they using First American Title?  Easy $ all day long for those guys...

aquabliss said:

I don't think you can opt out anyhow.  It's mostly a scam but this may give you a warm fuzzy:http://www.nolo.com/legal-encyclopedia/title-insurance-buyer-needs-36126.html

Edit: you can probably opt out if you're an all cash buyer but otherwise you're stuck as the lender will require it and bundle it with your closing.  Are they using First American Title?  Easy $ all day long for those guys...

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Yes, First American Title.  They said if I choose to opt out my cost would be even more higher because I would lose the "bundle" price.  This sounds like a big scam to me. 

Sounds risky.  But I'm no title rep or attorney.  You're spending hundreds of thousands of dollars and your concerned with an $1,100 insurance policy.

Like I said, I'm not an expert, but what if one of the sub-contractors of the home builder does not get paid by home-builder or a sub places a lien on your property due to the cause of the home-builder? Can this even be done in Cali? Maybe you want to speak to a title expert....

I'm no expert either but it's only a one-time purchase unlike a home insurance. I would not take that risk. If you end up being involved in a lawsuit regarding your title issues, your title insurance will defend you up to whatever the policy amount is.

RangeRover said:

I'm no expert either but it's only a one-time purchase unlike a home insurance. I would not take that risk. If you end up being involved in a lawsuit regarding your title issues, your title insurance will defend you up to whatever the policy amount is.

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+1 and the policy amount is up to the purchase price.  Besides, the owners title insurance is cheaper when buying a new home vs when the home is a resale (seller normally pays it at that point).

When was the last time you heard of a title issue with a new construction builder?  Even if there was an issue, what was the cost to fix the issue?  I think the whole industry is a bit of a scam and not enough people are asking questions on what they are really paying for when buying title insurance.  The industry knows this and that's why they do their "bundles" so you can't really avoid paying for it.

Out of 30+ properties I have purchased over the past couple of years, I had to resort to title policy 2 times. Granted, both were REOs with bitter past owners or prior issues with liens, etc, but even with a new construction, someone can always come out of nowhere and lay claim on the land or maybe a disgruntled contractor decides to go after the builder over some unpaid or disputed bills for the work it has done in your home. Will they get anywhere with their claim? Probably not, but just to defend yourself and make the case that their claim is baseless, you could be out several grands in legal fees with tons of headache. With the title policy in place, all you have to do is to forward the claim to them and forget about it.
Many people use quitclaim deeds to transfer interest in properties to family members and alike, not knowing that doing so will effectively void the title policy and the new owner won't be protected. That's why whenever I want to do a transfer to family members, I do a complete grant deed with a new title policy issued. A thousand dollars is a small price to pay to have the peace of mind.   

rayzam said:

Out of 30+ properties I have purchased over the past couple of years, I had to resort to title policy 2 times. Granted, both were REOs with bitter past owners or prior issues with liens, etc, but even with a new construction, someone can always come out of nowhere and lay claim on the land or maybe a disgruntled contractor decides to go after the builder over some unpaid or disputed bills for the work it has done in your home. Will they get anywhere with their claim? Probably not, but just to defend yourself and make the case that their claim is baseless, you could be out several grands in legal fees with tons of headache. With the title policy in place, all you have to do is to forward the claim to them and forget about it.

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Yes, I would agree that if you purchase REO properties, short sale properties, properties with a lot of previous owners, unique properties, etc. you should definitely get a title policy.  Pricing is the same whether it's one of these properties or a new construction property.

I don't mean to sound mean or anything like that. But are people that cheap? That they don't want to pay the title fee and are willing to take the risk that there might be an issue with the title.

If you buy a new home from a builder and subsequently here are title issues, couldn't you go after the builder? It would be a hassle but wouldn't that be an option?

With that said I'll pay the $1k so I don't have to worry about anything or deal with any hassles.

eyephone said:

I don't mean to sound mean or anything like that. But are people that cheap? That they don't want to pay the title fee and are willing to take the risk that there might be an issue with the title.

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I'm pretty sure he's not talking about the title transfer fee but rather the title insurance fee.

Another interesting bit of info I read is that 80% of the fee for owner's title insurance is commission and 20% goes to the actual policy writer.