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    North of NYC North of NYC By Houlihan Lawrence By Houlihan Lawrence by

    Our home buyers ask us this question frequently: "I'm buying a house with all cash, do I still need title insurance?" To find the answer, I decided to ask a title professional. I reached out to Charles Brundage, Esq., General Counsel of Thoroughbred Title Services, an affiliate of Houlihan Lawrence, and this is what he told me:

    The purchase of a home is usually the largest purchase one will make. If you take out a purchase money mortgage to finance the transaction the lender will require you to pay for title insurance to protect their interest in the property. If you are lucky enough to be able to purchase without financing you still should avail yourself of the opportunity to protect your investment by purchasing title insurance.

    Title insurance is unique in that unlike other forms of insurance, it protects you against acts that have already occurred, rather than things that may happen in the future. For example, if you find out after your closing that the previous owner did not pay real estate taxes and the taxes are now a lien on your property, you would be covered by your Owners Title Insurance Policy. Since the previous owner's delinquent taxes should have been disclosed to all parties involved in the transaction and were not, you would have a claim under your title policy. If you chose not to get title insurance you would be responsible for the back taxes and you would have to try to go after the prior owner to collect (good luck).

    Also, unlike other types of insurance, you only have to pay the title insurance premium once -- at your closing. You will not get renewal notices or bills in the mail post closing; you are covered for as long as you own your home. Banks will not close real estate transactions without getting title insurance because they do not wish to assume the risk that something may turn up that impairs their interest in the property. You should not assume this risk either. Everyone involved in a real estate deal is capable of making a mistake that could come back to haunt you as the purchaser. Why not let the title company worry about it and handle it in the event something does turn up?