Dec 2023
Do You Need Owner’s Title Insurance When Buying a Property with Cash

Do You Need Owner’s Title Insurance When Buying a Property with Cash?

By Marc Shaw

As interest rates continue to rise, more and more home buyers are paying with cash upfront rather than financing over time. Real estate data analysis firm ATTOM reported that all-cash home purchases accounted for 36.1% of total home sales in 2022, the highest level since 2013.

If you are planning on buying a home with cash, you may be wondering how the experience will be different than it would be if you were getting a loan. In truth, many aspects of your purchase will be the same, but there are some other considerations you will need to make. Because lenders often require you to purchase certain insurance policies, like homeowner’s insurance, for example, you may overlook these steps when buying a home with cash. 

Title insurance is another type of policy you may not have considered when making an all-cash home purchase. While mortgage companies require you to purchase a lender’s title insurance before they will loan you money for a home purchase, they usually don’t require you to obtain a separate owner’s title insurance policy to protect yourself from some common title defects. All-cash buyers may also neglect to purchase an owner’s title insurance policy. Although you are not required to purchase owner’s title insurance in an all-cash sale, it’s still a smart idea and one that no home buyer should overlook.

Why Buy Owner’s Title Insurance for an All-Cash Sale?

Whether you are mortgaging your home or you purchased it with cash, the need for owner’s title insurance is the same. Any title defect that affects your mortgaged home can still apply to your cash purchase, and many of them are covered by a standard owner’s title insurance policy. These include any defects that are discoverable by an examination of the public record:

  1. Competing claims of ownership, including those brought by undiscovered heirs
  2. Public records errors
  3. Forged or fraudulent documents in the chain of title
  4. Unpaid liens

A standard policy may cover some other situations as well, and you can add endorsements to your policy to cover others. These include:

  1. Survey endorsements
  2. Zoning endorsements
  3. Access endorsements
  4. Mineral rights endorsements
  5. Subdivision endorsements
  6. Endorsements covering encroachments on your property

These are only a few of the endorsements that are available to homeowners, and they cover specific situations. In general, owner’s title insurance can protect you from incurring costs related to resolving title defects that arise in the future, so it is important that you speak to an experienced title agent and carefully consider all the coverage available to you. The most important thing to remember is that going without an owner’s title insurance is never a good idea. This applies to both mortgages and cash sales. The bottom line: if you own a home, you need title insurance coverage!

Title Insurance in Pennsylvania, New York, and Nationwide

When searching for the best mortgage title insurance companies in New York and around the country, you want to find the one with the most experience and the greatest dedication to consumer protection. As one of the Northeast region’s largest title insurance companies, World Wide Land Transfer is highly qualified to educate you about title insurance and provide you with an appropriate policy. Since 2004, we have been providing excellent title and escrow services to consumers all around the country and we can do the same for you. Get in touch with us right away to discuss your next real estate purchase and find out more about all the coverage options available to you.

World Wide Land Transfer is a service-oriented PA title company with offices in Philadelphia, New York, and Washington, D.C. With a record of going above and beyond, we are trusted to close everything from complex commercial transactions to residential refinance and purchase transactions.

Leave a Reply

Your email address will not be published. Required fields are marked *

Sign up for our newsletter

    We're happy you decided to subscribe to our email list.
    Please take a few seconds and fill in the list details in order to subscribe to our list.
    You will receive an email to confirm your subscription, just to be sure this is your email address.