Yes - Always - Title Insurance with Owner Financing - Posted by Judy Miller - American Note
Posted by Judy Miller - American Note on February 27, 2000 at 20:42:15:
Always, when you purchase a property, get title insurance! Even if you are getting a “good deal” and title insurance is not provided to you by the seller, please, GO GET IT! Make sure your title, the money you are investing, is marketable. You cannot sell that property if title isn’t clean. Can you imagine spending cash to purchase the property, and lots of hard-earned money to fix it up, then, upon your attempt to sell the property, or the note created, you find out that you don’t have clear title. This is a serious WHOOPS!
if you are creating a seller-financed note, whether or not you received title insurance when you PURCHASED the property, you are definitely going to have to provide title insurance if you are going to sell the note at escrow. If, however, you are selling a seasoned note, then usually the note investor will pay for the title. However, if they learn that no title insurance was obtained at your purchase, this may become a negotiable issue. In the midwest and other places, often there has been no title work done for many years and transfers, and the title officer or attorney has to work from an abstract, a very antiquated and slow way to check the chain of title. Be safe, get it when you purchase to protect yourself.
As for selling your note, you may not need to give title insurance, but title insurance, or proof of clear title, for the note purchaser, is MANDATORY.
Judy Miller - President