Posted by Ron Ohara on January 13, 2001 at 13:43:51:
Your best bet is to contact a Title Company in that County and State to see if Contract for Deeds are insurable.
Any time you are purchasing with a Contract for Deed, you should always obtain a Title Insurance Search.
On one transaction that I was purchasing, after receiving the Title Search, it was discovered the last 5 owners to the subject property all purchased under a Contract for Deed. The hardest part in purchasing this Contract was trying to locate the original owner of the property and all subsequent owners thereafter.
As it went down, our Seller was paying to the Seller in which he purchased and so on and so on.
If a Contract for Deed is recordable in that County, it should be insurable. Speak to you local Title Company and they should inform you right away.
Posted by tactikon on January 11, 2001 at 21:21:25:
I am attemping to purchase a Contract for Deed note in Kentucky and was wondering if I could get Title Insurance on that in this state .Any help appreciated.
You are not looking for a “lenders or mortgagee” type title insurance policy when purchasing a contract for deed. The title insurer is insurance the conveyance of title to you from the existing property owners.
When purchasing a contract for deed (CFD) type instrument you will be looking for the title insurance company to insure the transfer of LEGAL TITLE from the current property owners to you “subject to” the contract for deed which may or may not be recorded. You will also want to obtain an “assignment” of the CFD instrument as well. It is not typical to see a seperate promissory note used with a CFD, as usually the repayment terms of the debt are spelled out within the CFD instrument itself.
The reason you want to have title is to be able to DELIVER title when the CFD is fufilled.