Title Insurance: do you need title insurance on a BRRR

[Mark Davis]

My brother and i just purchased a house at a tax lien judicial sale

the judicial sale in chester county is such that is supposed to be free and clear of all liens.

currently, there are some municipal liens against the house for water and trash collection.

from what i understand, the excess of the monies paid over the county taxes goes to pay the other creditors.  (being the municipal payments)

i am guessing a title search would reveal all these liens.

my question is .. once all these liens are resolved (by the county with proceeds from the sale).  when do we need title insurance.

do we even need it?   

part of what the county sale stipulates is that the property is free and clear of any liens

from the chester county web page

• Unlike an upset tax sale, properties sold at judicial sale are sold freed and cleared of all liens, mortgages and other judgments on the property.
• A title search of the property is completed and all lienholders and other interested parties are served a copy of the Petition for Judicial Sale by a deputy sheriff. This is a very tedious and time-consuming process controlled by many variables.

it looks like there is a title search done by the county and if the county says that all the liens are clear... do i need title insurance?....   from what i understand title insurance covers me for something that happened in the past that a title search didnt find...

we WILL want to get a mortgage on the property, to get our money out (BRRR) at that point.. do we need title insurance?

[Tyler Sterns]

When you get a mortgage the lender will probably require that you get a lenders title insurance policy. Tax sales are considered very risky by title insurers. In my state it is hard to get title insurance on a tax sale property for 2 years. 

Title insurance covers more than liens, there could be a missing owner in the chain of title, the tax sale may have not been done properly, all junior lienholders may have not been notified etc.