Do you have to have title insurance?
TECHNICALLY no, BUT you really SHOULD and if you are financing property you will have to or the lender will not finance. So what does title do and how to get around it?
The only way I am aware of it is to pay cash or do seller financing where no loan from an institution is required. Title insurance main function is to make sure property when property is transferred there are no liens, encumbrances on the property LEFT by the seller or BROUGHT ON by the buyer. What do I mean?
Well as a seller title makes sures any loans are paid off, cleared before property is transferred to the new buyer. If you have any mechanic liens, outstanding taxes, any types of debits that are tied to the property they will need to be paid off PRIOR or DURING close of escrow normally done WITHIN escrow. As a seller you want to make sure nothing lingers over you AFTER escrow closes and as a buyer you do not want to encumber any debits from the seller that are not yours. What about title insurance on the buyer?
Mainly this is to ensure there are no liens AGAINST THE BUYERS NAME prior to closing escrow. The new lender does not want to see any liens against the buyer that could possibly effect the property AFTER the buyer takes ownership and possession.
If title misses something the insurance will cover it and deal with it so the buyer or seller may have comfort after escrow closes there are no other issues.
A QUICK NOTE ON THE CURRENT MARKET! It is changing. NOT CRASHING but changing. Really take note and make adjustments on moving forward NOT THE PAST and in real estate the past can be just last week!