Importance of Owner’s Title Insurance

By Brian Mason – Signature Move Real Estate

Yes, in the month of February, I was escorted out of a building by security! Let me explain! My client wanted to buy a house. Relocating from Florida to here. Spent some time, found a house, made an offer, and, after some back and forth, got ratified. Everything is going well. My client wanted to close early. Fantastic! Told the title company, told the lender, and it all seemed good til…*ring, ring* “Hello,” I politely answered. The Evil Voice “We cannot close early because the title is not insurable.” Well, there are a couple of issues that cause a title not to be insurable, and typically, that is when there is some type of lien against it. This means we find a way to release it, and all is good.  But this was not the case. This time, it turned out that the title was never properly transferred from the Seller to the Buyer (Current Seller) in 2004. What is worse, is this was a new construction back in 2004. 

I politely asked, “How does this get resolved?”  I was told that the seller’s settlement company could not figure it out. The company that sold the new construction, well, their corporation dissolved, and they cannot reach anyone who was affiliated with them. They tried old phone numbers, emails…nothing. 

Hmm, do I sit back and relax and say, “What can I do?”  No, I go on the war path! Did research, and The Corp had a very unique name. I did what we all do and Googled them. Found a company with the same name, but in Virginia, and thought, yeah, not a coincidence. I looked at the deed and also found the law firm that created it back in 2004. So yes, I went to the places physically (since no one answers their phone, and this was of most importance) and received some information. I passed it along to assist. 

Anyway, no luck, and I was told that the seller’s would have to file a claim. A claim takes 6 months! This is unacceptable. Thankfully, the settlement agency found a note from the county that stated they could not record, and notified Albany (not her real name) of the issue and that she would fix it…back in 2004. Well, Albany did not follow up. Luckily, I had Albany’s last name, and I looked her up on LinkedIn. 

To my surprise, Albany has been working at the same company since 2004…20 years later! This is an anomaly in the title industry, from my understanding. Well, great, but Albany has no phone number. Everyone else tried to get a hold of Albany’s company, but it just rang, and voicemails were left. That is okay, because I found a way to track down her phone number. Sure, she freaked out that she was contacted on her personal phone, but my client was about to be homeless.

After the initial shock disappeared, she probably saw the pending lawsuit that was going to happen for not completing this 20 years ago. She starts working on this, but my client is nervous because he does not believe I can get this done. I calmly reassured him, but yes, I was nervous. Albany does her stuff, but now it has to be sent to the point of contact for The Corp to sign off on it. 

One day passes, and nothing and no timeline is given. We now close the next day! We have to close! I have options and decided, I am going to The Corp’s office building and talk to C Suite. I went there and told the front desk why I was here, and they stated they would send a message. Nope, I am going to sit here til I see C Suite. Well, four hours of my life passed by, and no C Suite. In fact, they are now closing because it is 5:30. I was asked to leave, but I refused, and boom, security was called and gently escorted me out. OMG, I failed…..or did I cause enough commotion that it got signed that night? Maybe it wasn’t me, but it was signed, and we closed the next day! 

The moral of the story is that Owner’s Title Insurance should be considered. I used to think, what were the chances? But then you have situations like this that happen. The seller did not have to use it this time, but they almost had to file a claim. The Seller’s title company tried to persuade my client to switch, and they would insure it. I do not know how, and it seems a little unethical, but it would be his problem when he tried to sell the home. Of course, I recommended to him that he get it fixed right to avoid a similar catastrophe in the future. Even in new builds, oversight seems to happen, and it is in the best interest to pay that one-time fee to ensure you do not have issues 20 years later. 

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