Utilizing a title company when purchasing property gives you access to important services like a title search and exam and also presents the option to purchase owner’s title insurance. Take a look at the story below to see how Paul and Donna missed out on the benefits offered by title company services and title insurance.
Paul and Donna dreamt of jumping into the flip & rental business. They searched and searched but nothing caught their eye. That is until they found the perfect starter home in foreclosure and in need of some TLC. They successfully won the bid for purchase at sheriff’s sale and acquired the property by cash. They did not use the services of a title company to purchase owner’s title insurance or title research.
Paul and Donna hit the ground running and put thousands of dollars and hundreds of hours into renovating this flip. The project is coming to a close when the previous owner comes forward stating he was not given proper notification about the foreclosure. The previous owner is furious and states that the sale of his home is now void and he will take the steps necessary to redeem the property.
Upon further investigation, it is revealed that a person with the same name as the previous owner was served the foreclosure. This person filed that he was not the owner of this property, and they served the wrong person, but the home continued into the foreclosure process.
The sale of the property to Paul and Donna is now void, and they have lost the property. With title insurance, this couple could have protected themselves. Though they would have lost the house, they could have at least recouped the money spent.