LIFE

Monte Mohr: Title insurance helps bring peace of mind

Monte Mohr
For The Tennessean;

JR from Murfreesboro writes, “I was told by my agent recently that even though my wife and I are paying cash for our next home, we should never buy a home without getting title insurance. It seems like a waste of money since we are not being required to get this insurance by a lender. Do you agree that it would most likely be a waste and not to buy it?

What you’re thinking makes sense, JR. Why spend the money on something seldom used when not being required to? Here’s the potential issue that can happen.

Several years ago, I listed a home for a couple who had done exactly that. They bought a home from an older gentleman who had owned the place since it was originally built in 1952. He had paid the place off years ago. They were paying cash and though it was customary for a seller to pick up the expense in Davidson County for title insurance, he refused to, saying it would be an absolute waste, as he had owned the place free and clear for years. He was convincing enough that they agreed it would be an unneeded investment and didn’t pay for it for themselves.

A few years later they decided to sell their home. This time the new buyer was getting a loan from his local bank, which required title insurance on the property. When the title search was done it was found that there had been a $10,000 mechanic’s lien filed against the home years before that had carried over all this time and was now going to be the seller’s responsibility.

It turns out that Mr. Smith, the original owner, had gotten into a disagreement with a roofing company about the color of shingles he had requested and refused to pay them for their work. The roofing company did what any unpaid vendor can do — it put a lien against the old gentleman’s property. Because that lien was not discovered before my clients purchased the home, it now became their problem, as they could not pass clear title to the new owner without paying that old bill off.

I’ll never forget the look on their faces when they found this news out, as this added expense almost kept them from being able to sell the place.

Yes, JR, your agent is correct. And I strongly recommend it as well. Always get a title search done and title insurance on any property you’re thinking of buying. The small investment for the peace of mind is well worth it.

Monte Mohr is a broker with RE/MAX Elite. Learn more at www.tennesseedreamhomes.com.