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should i pay for title insurance

agrainger

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i am purchacing wyndham from rpmi and they tell me i can get insurance if i want but they say you don't really need it.

did you buy title insurance

thanks,
brett
 

Jim McLaren

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For me title insurance doesn't see worthwhile for a TS. AFAIK you only are protected for the amount of the purchase. See the article here. The title insurance company should do a title search for you and you can feel comfortable that the title is free and clear of any encumbrances, etc. A good closing company will do that for you too. IMO title insurance is just an added expense. Others will disagree.
 

Dave H

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Title Insurance... to buy or not to buy.

The bigger question is how much are you buying for and what is YOUR risk tolerance? If their is a lien or judgment title insurance can be a wonderful thing. If an unknown heir pops up from an old owner, title insurance is a wonderful thing.

That being said, if you can stand the loss if a court took it away, then you do not need it. If it is more than you can afford or stand to lose, it could be a good thing.

The problem is that buyers say I got the estoppels and everything is current, I called the resort and they said it is clear title. Yes, that is correct from THEIR viewpoint.

Did anyone go look in Probate records to see if there is a probate. Did anyone go look to see if their are judgments recorded against any of the old owners. What about those judgments that show Donald Smith, is he the same person as the Don Smith selling his timeshare? Does Donald's judgments attach if Donald and Don are the same person (no offense to anyone on here named Don or Donald, just a common name).

Resorts DO NOT know what liens are out there against an owner. They can only tell you if there is a lien that they created.

I had one not to long ago, the buyer did buy title insurance, it was a small purchase, under 5k. The resort gave us CLEAR estoppels. The MF's were paid at closing.

1 week after the closing and funds sent out, the resort because they had not gotten 2008 payment by the date they felt they should have had it, filed a lien against the "OLD" owner. The lien recorded AFTER the new deed, but the resort would not transfer the unit until the "Lien" was paid off.

Here is a case, the resort, a major one at that, knew of the potential lien coming up, issued a clear estoppel showing 08 dues being due. They never told anyone that the lien was in process.

Poor buyer wants to book and the resort is telling her until the lien is paid off, good luck. Her title insurance policy kicked in and covered the lien. We are talking a whopping $175 claim.

So the moral for all that say, I checked the resort, can you really be sure what they are telling you is really giving you clear title. For those of you who say you checked the public records, do you know what really attaches and what does not? How about those sellers or closing companies that give you a Quit Claim Deed. Good luck trying to recover your money.

I have seen weeks that had Federal Tax Liens, State Tax Liens and regular judgments attached to them. The resort will not know that. A good title search and title policy will find that.

Dave
 

Dave H

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Jim: You posted at the same time I did. The point about title insurance only covers you for what you paid goes for your home as well. Insurance is to cover your loss. If you bought for 5k, then the most you stand to lose is 5k, they do not care that you can sell it for 15k. What did you really lose out of your pocket?

I was in a car accident not long ago, the party hit me did 3k in damage, I would like a new car, but I got paid what the damage was, not the price of a new car:bawl:. That is how all insurance works. You get what the loss was.
 
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richardm

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i am purchacing wyndham from rpmi and they tell me i can get insurance if i want but they say you don't really need it.

did you buy title insurance

thanks,
brett
I always recommend a full closing with title search and title insurance.. With the number of personal bankruptcies continuing to rise- it just makes sense to have as much of a safety net as possible. Shame on Delva's salespeople if they recommended that you not get it. Especially when you consider the amount of money you are already saving on a Wyndham resale, it should be an easy decision..

If you are willing to take the risk, and many people are- just be sure that you fully understand the difference between the two closing processes. Don't be fooled- an estoppels is not a title search!
 

Bill4728

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Personally, I would not pay for Title insurance unless the purchase was over $4,000. Anything over $10,000, I'd for sure want it.
 

yumdrey

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I purchased westin kierland a few days ago and asked broker about title insurance. That lady said Arizona timeshares don't need title insurance because title search is so easy and simple. So I didn't buy title insurance. After I have read this post, I am so worried.
Can I purchase title insurance in the process of closing, or is it too late?
 

bnoble

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I always recommend a full closing with title search and title insurance.
In two of my three purchases, the title insurance would have cost more than the week did. In the other, I could afford to just walk away from it. That's the benefit of buying el-cheapo.
 

Dave H

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I purchased westin kierland a few days ago and asked broker about title insurance. That lady said Arizona timeshares don't need title insurance because title search is so easy and simple. So I didn't buy title insurance. After I have read this post, I am so worried.
Can I purchase title insurance in the process of closing, or is it too late?
Yes, you can still buy it after the fact. It will require a full title search for the policy to be written just like if you did it before you bought.

The difference is any liens or judgments that were out there will become exceptions to the policy, but at least you will know what is out there.

If you need someone to help you on Arizona, drop me a pm. I am not licensed there, but have a business partner that can do it for you.

Dave
 

Dave H

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Personally, I would not pay for Title insurance unless the purchase was over $4,000. Anything over $10,000, I'd for sure want it.
Bill:

I agree with your thoughts. YOUR tolerence is 4k. For some others it might not be that high. Like Rich, I recommend it on all of my closings, but it is the clients decision. I would say your right on target, over 10k it is a requirement. I can not tell you how many I see that are double, even triple that and they go naked on title insurance and depending on the state is less than $300 for the policy with a search.

Dave
 

Lingber

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I am purchasing a timeshare from an owner who bought directly from Hyatt. If their is no mortgage on the property or it is being paid off at closing, what other problems could arise with the title? I am planning on purchasing title insurance, but wondering if I really need it.......

Thanks!
 

Dave H

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I am purchasing a timeshare from an owner who bought directly from Hyatt. If their is no mortgage on the property or it is being paid off at closing, what other problems could arise with the title? I am planning on purchasing title insurance, but wondering if I really need it.......

Thanks!
Does the owner have any judgments, money judgments, suits, liens, creditors liens, federal tax liens, state tax liens, matters of probate, etc that have been recorded against him in the State/County the timeshare is located in? These are just some of the things that can affect title.

I just finished a search in Virginia, there is a 19 year old judgment against the deceased seller. It actually is still a good lien.... for another year, so he owes someone $555 plus 18% interest for the past 19 years, that payoff will be a few grand I am sure without running the numbers.... good thing the buyers wanted title insurance. An this was on a $1200 purchase...

Remember not every state makes this a public record so trying to do an internet search is by no means proof positive.

Dave
 

Lingber

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Thanks for the info Dave! 2200 points at Hyatt is not inexpensive.
 

vacationtime1

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Does the owner have any judgments, money judgments, suits, liens, creditors liens, federal tax liens, state tax liens, matters of probate, etc that have been recorded against him in the State/County the timeshare is located in? These are just some of the things that can affect title.
Is the owner married? Was the owner married at any time s/he owned the property? Does the spouse have an interest under state law? Does the ex-spouse have an interest under state law?

Just because the deed has only one name on it does not mean that there is not a spouse (or angry ex-spouse) with an interest in the property.

Another reason for title insurance on properties worth more than your personal risk threshold.
 

Dave H

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Is the owner married? Was the owner married at any time s/he owned the property? Does the spouse have an interest under state law? Does the ex-spouse have an interest under state law?

Just because the deed has only one name on it does not mean that there is not a spouse (or angry ex-spouse) with an interest in the property.

Another reason for title insurance on properties worth more than your personal risk threshold.
Exactly, a lot of states, one to buy, two to sell
 

emilyjames

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Will Title Insurance guarantee no liens?

I am in the process of obtaining title insurance on a recent purchase--my concern is that the deed is a Grant,Bargain Sale one. Will title insurance protect me from any claims levied against previous owner?
 

Dave H

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Emily:

A Grant Deed is used primarily out West. A Grant Deed is very similiar to a Warranty Deed or a General Warranty Deed in that you get Warranty of title.. You need a Warranty or a Grant Deed to issue title insurance, so you should be fine.

I posted this a while back, might help in understanding the types of deeds..

Easy way to remember:

Quit Claim Deed: I quit (give) any claim (interest) that I MIGHT have in the property, MIGHT have had in the property or someday MIGHT acquire.

If you look at that, it MIGHT really give you ownership, then again it MIGHT not. Notice the keyword in there?

A Warranty Deed, the seller(s) WARRANT (guarantee) they own the property and WARRANT that the property is free from any and all liens and encumberances and WARRANT they have the right to SELL, CONVEY and DELIVER marketable title.

There are also Special Warranty Deeds and others that limit those warranties, but are seldom used in the timeshare business.


And yes, the title insurance gives you certain protections from things that are not already in Public Records.... lets assume the seller was divorced and the ex-spouse was still on title but did not convey their interest.

Title Insurance would protect you up to the price you paid for the week and unit or they may just offer the ex-spouse $$ to sign their interest in the unit to you to clear the title defect. Since it is insurance, they just do not open the checkbook, they try to fix the problem to make the insured YOU whole.

If it can be done by getting a deed signed, they will do that. If they can not and the ex-seller fusses and will not deed off, they could possibly make an offer to you to have you sign a deed back to the pld owner.

I can relate to one on a house sale, the lady selling claimed she was single, after closing the "Husband" showed up, said I have maritial interest, you need a deed from me and I want half of what she got. Hate to say it, title insurance had to protect the new owner and in that case, the "husband" agreed to sign a deed to the buyer for a 5k settlement. Half of what she made... Title Insurance does pay out, but will only pay out for the actual loss.
 
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Harry

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Wow, you better join TUG

Brett,

You got some great advice here. In smmary it depends on how confident you are with your seller and the resort you are buying. Re-read Dave's comments above. I think he has pointed out what could happen but for the most part doesn't in timeshare conveyances. You are buying a class resort that has had title insurance at one point.

Note to Yumdrey above: Unless an attorney, the broker is practicing law without a license which is a crime in AZ. The correct advice would have been exactly what I indicated, no more no less.
 

richardm

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Brokers recommending against title insurance...

I purchased westin kierland a few days ago and asked broker about title insurance. That lady said Arizona timeshares don't need title insurance because title search is so easy and simple. So I didn't buy title insurance. After I have read this post, I am so worried.
Can I purchase title insurance in the process of closing, or is it too late?
Not sure who you are working with, but be aware that there are a few agents and brokers who prefer not to have a title search done- as there is the risk of a cancellation if a is problem found that can't be easily corrected. Also, title errors can sometimes not be discovered for years after the purchase.

With the economy and the current slowdown in sales that many offices are feeling- perhaps the recommendation was for the broker's benefit and not yours. There are some resellers that haven't had a sale in months- and desperation can certainly cloud professionalism.

The other possibility (and hopefully the more likely of the two) is that a title policy may not be available for the property you are buying. There are instances where the developer takes over an existing condominium, and does not accept the expense of creating a master policy for the entire resort. In these cases, it can be either impossible or ridiculously expensive for an individual interval owner to purchase a policy.

Regardless, if you have any concern- you certainly have the right to find out if a policy is available to you. PM DaveH and he can give you contact info for title providers in that area. Once you have an estimate of cost- you'll be able to make an informed decision if it's right for you!

(Congrats by the way on a great choice of resort!)..
 

vacationtime1

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The other possibility (and hopefully the more likely of the two) is that a title policy may not be available for the property you are buying.
Title insurance is available on Kierland; I have it. My policy was written by Chicago Title which is a major player in the title insurance world. I suspect other title insurance companies would write it as well.

The decision whether or not to buy title insurance is just a numbers game. But if it helps you sleep better at night, you should have it.
 
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richardm

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Title insurance is available on Kierland.
Sorry- not sure how I missed the resort name in the previous post. Vacationtime1 is correct- title policies are available for this resort. You can obtain it from any of the larger underwriters that work with timeshare.
 
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