Condo Contract Question

It's important to understand the role of a Title Policy when purchasing a condo directly from your friend. A Title Policy will protect you in the event that any issues arise with the title of the property. It provides assurance that the title is valid and free of any liens or other issues. Even though you trust your friend, it is important to consider the potential risks of not having a Title Policy in place. When dealing with the lending bank, they will likely require that you obtain a Title Policy before they approve the loan. Without the Title Policy, it is likely that the bank will not approve the loan. To answer your question, it is not recommended that you skip the Title Policy area of the contract. It is better to be safe than sorry, and having the Title Policy in place will help ensure that you are protected in the event of any issues with the title.

While it's great that you trust your friend 100%, it's still important to take the necessary steps to protect yourself and ensure a smooth transaction. A title policy is a form of insurance that protects you in case there are any issues with the property's title, such as liens, easements, or disputes over ownership. It's generally recommended that buyers obtain a title policy to ensure that the property they are purchasing has a clear title and is free from any potential legal issues. Skipping the title policy area of the contract could put you at risk if any issues arise in the future. In addition, even if your friend owns the property fully and the bank is the same one he used to purchase it initially, there could still be title issues that are not immediately apparent. It's better to be safe than sorry and obtain a title policy. If you still want to skip the title policy, you should consult with a real estate attorney to ensure that you are aware of the potential risks and that you are taking the necessary steps to protect yourself. The attorney can advise you on any other necessary steps you should take to ensure a smooth transaction. ***contact info*** Aziz Qwasme’ (281)818-1931 Zazahtx@gmail.com IG: zaza_living Zaza living llc

I would recommend to always get the title policy and most lenders may require this as well. There may be an item on the title that he was not aware of and maybe one that doesn't legally belong to him but one that needs to be cleared before transferring title.

ALWAYS get a TITLE POLICY! It protects your investment. You would hate for years down the road someone show up at your doorstep saying that the property was deeded to them or left in an inheritance. The title search will show that there is a clean chain of title and that if the example above were to happen you would have insurance. If in doubt, please contact an attorney or title company that has an attorney affiliate.

Jamie McFarlane
ABR, GRI, SMP, MRP, CSMS Realtor
409-739-1754
Jamie.mcfarlane@ymail.com

If you are using a conventional lender, it is probably not an option to not get title insurance. The lender will probably require that and an appraisal...not to protect you but to protect themselves. I personally would not buy a property without title insurance. Too many things can happen. If you ever sell the property, they will come up at that time...Your friend may not even know about the issues....I would just get the title insurance.

There is no good reason to not take title insurance policy. Let me give you a counter example: your friend is in good faith, he has no other liens, sells the property to you without title insurance. However, two years later, his ex-spouse comes back and claims entitlement to a portion of the sale or that the sale is void because acquired during their time in common. 50% of your ownership is at risk and you will have to front the legal cost yourself.
This is a very frequent situation. Title insurance will cover your legal costs in such situation.

Over the last 10yrs as agent I have seen a lot of friend to friend transactions, and even though this person is a highly valued and respected friend I would still advise you consult with your attorney at least especially one that specializes in Texas real estate law in order to protect your best interests.

"Always remember to hire your own personal home inspector and appraiser. Before you purchase any home. You wouldn't want to purchase a problem would you? Due diligence is key to saving thousands!"

David Smith
The Reyna Realty Group
281-732-3090

I wouldn't recommend to skip the Owner Title Policy but I think it would be best in this instance to speak with a Real Estate Attorney and Title representative to make a more informed decision.

Go ahead and pay for the Title Policy. Much better to be safe than sorry....

If he doesn't have representation from a Realtor to advise him in this matter I would have him seek legal counsel to ensure his best interest is kept.

I would Definitely order the title policy, obvious Pros v Cons and I would also get an inspection as well.

There could be discrepancies/issues even your friend the seller has no idea about it. It protects your friendship.

Protect your asset

Would you deposit your life savings into bank that was not FDIC insured if they were your neighborhood bank?

I commend you for going to professionals for advice. The line between friendship and business can be a very fine and more like walking a tightrope without a pole if you are trying to get a good deal and keep your friendship.
My advice is that you forget about trying to save a few dollars and concentrate on keeping the friendship by hiring a Realtor to make sure all parties are treated fairly and nothing is missed that can come back and haunt either of you.

Zac,

I highly recommend you seek an attorney if neither of you want representation from a realtor. The title company will be a great resource as well! You just want to make sure everything is lined up and everyone is protected on both sides of the transaction. Even though you both trust each other completely, mistakes can happen.

Feel free to contact me if you have any further questions.

Darby Grimmett
Keller Williams
darby@darbygrimmett.com
936-827-9217

This is an excellent question.
Here's an excerpt from the TX Dept of Insurance website, that begins to explain what title insurance protects. And, it says you must reject owner's title insurance in writing, if you do not want it. However, your lender may require it. Discuss the financing's requirements when it comes to how much title insurance you will need to qualify for your financing. I'm also including a link to their site at the end.
I hope this answers your question.

"Title insurance protects you and your lender if someone challenges your title to your property because of title defects that were unknown when you bought the policy. Most lending institutions will not loan money to purchase a house or other property unless you buy a "mortgagee" title policy.
This policy protects the lender?s investment by paying the mortgage (loan amount) if a title defect voids your title. When you buy a house, the title company also issues an owner?s policy, unless you reject it in writing. The owner?s title policy protects you against the covered risks out in the policy."

link, http://www.tdi.texas.gov/title/title.html