Dear Grumpy Realtor,
My realtor strongly suggested that I consider “title insurance” before getting into the purchase of a home. What the heck is that? Seems like a scam to me, but I figured you’d set the record straight.
Bleeding Me Dry
You certainly don’t NEED title insurance, as long as you can sleep at night with the notion that some clerical error (or human malice or stupidity) from years ago won’t come roaring back to bite you on the keister and land your family on the streets. Basically, you’re dropping a small amount (usually around a grand) to ensure that you and the bank are covered in the event that the sale of the house wasn’t technically legal from something that happened in the past. For instance, maybe the lady you’re buying from co-owned it with her now ex-husband and is selling it behind his back. Or that even further back in the house’s history, the proper steps were not all followed to allow legal transfer of the title. Title insurance covers your massive financial investment in the event that your house turns out not to legally be yours after all. Sweet dreams!