Owner's Title Insurance Needed for a Condo???

[BrokeStudent2010]

I'm closing on a condo this week, and I don't want to purchase owner's title insurance. The condo is a 4 unit building with all new construction after a developer bought and rehabbed it last year. My agent says I should buy the owner's title insurance. He hasn't given me a good reason why it's worth it besides the highly unlikely chance that there will be a challenge to the title at some point. I think condos are different than houses, and the chances of a there being a title challenge on a condo are even slimmer than on a  house on a plot of land.

Another important factor is that this is the first time the building is being sold as a condo. It was previously owned by one person who rented the 4 apartments. It recently got it's condo paperwork all done.  So, I feel like if there's a challenge the challenge would be to the entire building and not just my unit. In that case, if at least one of the other people who live in the condo has title insurance I kind of feel like everyone else would be covered. I'm not saying I want to rely on another person's title insurance covering me, but it just seems like common sense. If that one person can prove the title is clear then it automatically follows that we all have clear title since the building was every only owned by one individual homeowner in the past.

What are your thoughts on buying owner's title insurance for a condo?

[DallasLoanGuy]

lender will require it.

[BrokeStudent2010]

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@DallasLoanGuy wrote:

lender will require it.

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Where I live, purchasers are not required to buy owner's title insurance. The lender is required to buy lender's title insurance, but that is separate from owner's title insurance. My question is only about purchasing an owner's title insurance policy on a condo.

[StartingOver10]

Your contract govern's who pays for owner's title policy and who pay's for the lenders policy. Here, where I am the owner (seller) pays for the owners policy and the buyer pays for the lenders policy. The lender does NOT pay for any title insurance

check your contract

[DallasLoanGuy]

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@StartingOver10 wrote:

Your contract govern's who pays for owner's title policy and who pay's for the lenders policy. Here, where I am the owner (seller) pays for the owners policy and the buyer pays for the lenders policy. The lender does NOT pay for any title insurance

check your contract

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agreed. here we charge the lender's title ins to the borrower.

[BrokeStudent2010]

You guys a misunderstanding my question. I know that as the buyer I have to pay for the owner's title insurance and the lender's title insurance. But the lender title insurance is the only one that is required. The owner's title insurance is optional. My question is about whether it is worth it to buy the owners title insurance, since I'm purchasing a condo, and this is the first time this building will be a condo. I know that I have no choice about the lender title insurance being included in my settlement and closing costs.

[BrokeStudent2010]

I misspoke earlier when I said that the lender pays for the lenders title insurance.

[aussiesareforever]

I would just buy it. I looked at your previous posts and we bought similarly priced condos. I believe my owners insurance was about $71. My condo is only about 3 years old and had one owner before me. In the grand scheme of things, I would just get it, not worry about it and enjoy your new condo. I am loving mine

[BrokeStudent2010]

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@aussiesareforever wrote:
I would just buy it. I looked at your previous posts and we bought similarly priced condos. I believe my owners insurance was about $71. My condo is only about 3 years old and had one owner before me. In the grand scheme of things, I would just get it, not worry about it and enjoy your new condo. I am loving mine

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Wow, $71! That's an amazing price. The prices I'm looking at are $1265 for the standard insurance and $1540 for the enhanced insurance. I'm in DC, where the title insurance rates are regulated, so there's no shopping around unfortunately. I'm still leaning towards not buying it, but I'm going to talk to my LO tomorrow to see how it's going to impact my final closing costs. If it's still pretty close to the good faith estimate then I guess I'll cave and buy it. 

[aussiesareforever]

Holy cow. That is a big difference. I just looked at mine again just to be certain. My lender's title insurance was $1184 and owner's was definitely only $71.00. I see why it is a big deal for you. Good luck and congratulations on the condo. Love urban living and wonder why I hadn't done this a long time ago!!!!