Sheriff sale auction purchase.. should I buy title insurance?

[Huggy Baird]

I purchased a home at an Ohio Cuyahoga County Sheriff's auction today for $46k. The comps are in the $110k area. The liens and taxes look good on the auditor and clerk of courts website. Nothing that wont clear up with this proceeding.

I have not bought a home at sheriff auction since 2003 and am rusty. For years I've been purchasing via MLS and FSBO. But given the heightened competition I'm branching out into auction to find deals this year... and it appears to be bearing some fruit as long as this home is not a complete train wreck when I finally get to see it.

My question since this is semi-new territory for me: Should I contact my title company and purchase title insurance? Or not spend that money (assume the risk) since rarely do liens show up later?

Are there any other suggestions?

[William Bannister]

I agree with David that are certain things buying title insurance will put title insurance company on the hook for but the problem is this. Look at your your title policies today they usually inoculate themselves to liability in the transaction. Over time more and more I am seeing the documents in my face I must sign to say I agree that they are not liable. What am I paying form if they arent helping me to clean up my title?
I basically wind up paying them to research for me then tell me they could be wrong dont hold me accountable if I they are.
So this is my opinion I would at least pay for preliminary title work to get the research but maybe thats it. The legality of title companies making any lien go away is highly unlikely. a 1910 tax bill that is unpaid and this held up in court? No probably you paid it to avoid court because it was a small lien. The aspect we are really discussing here is research not liability. Liability is yours if you buy it not the title companies..The title company will make sure they write themselves out of many liabilities. The greatly reduces the value of a policy in general.
This is another reason why half the time they shove a special deed down your throat when you buy bank property since no one wants to say its clean. Title insurance isnt quite as good as just sue for quiet title. cleaning up a mess in the chain of a title isnt easy and even bringing suit for quiet title can leave you open to attack by a jurisdiction later on in the life of ownership from previous claims. Here is just one of a bunch of examples of what seems to me a pretty blatant disregard for the basics of property rights. Here is just one example of my research below.
There is no statute of limitations governing quiet title actions as such. Rather, the statute of limitations for an action to quiet title depends on the theory of recovery. (Muktarian v. Barmby (1965) 63 Cal.2d 558, 560.)
In some cases, no statute of limitations runs against a plaintiff seeking to quiet title while he is in possession of the property. An outstanding claim that amounts only to a cloud on title is a continuing cause of action and is not barred by lapse of time until the hostile claim is asserted in some manner so as to jeopardize the superior title. Accordingly, so long as the adverse claim lies dormant and inactive, the owner of the superior title may allow it to stand indefinitely. (Western Title Guaranty Co., Sacramento County Division v. Sacramento and San Joaquin Drainage Dist. (1965) 235 Cal.App.2d 815.) Where the plaintiff remains in possession of the property, the dormant adverse claim does not trigger the statute of limitations. (Smith v. Matthews (1889) 81 Cal. 120, 121; McNulty v. Copp (1949) 91 Cal.App.2d 484, 493.)
When I tried to do legal research on this matter so many historical cases came up supporting both sides of this issue, that it amounted to a total break down in the legal system that doesnt recognize any particular piece of real estate law on the matter trumping all others.
It means title insurance is not worth much besides research. Bobby Gerry is right why bother if you are capable yourself.
Its a service to you and maybe banks require it but its does not clear up old matters.
This is murkey water and you take your chances in my opinion however buying title insurance and sue for quiet title does do something. It tells the court you made an attempt to handle your business using the matter of law on which the foundation of our civilization is held up.
All judge's knows if they begin stripping property away from enough people or entity eventually that governing geo area will become unstable and not a safe place to invest money. This country has a tradition of recognizing common law and our history in legalities thereof certainly show that in most cases.
My opinion buy title insurance or bring action for quiet title but your title is still not always going to be clean.
For people like me I cant stand this, it boils my blood that government allows this. Real Estate attorneys please do jump in comment on this matter? If you disagree please explain so I can gain a better understanding. I have been investing in tax deed property for 20 years and still feel like in some jurisdictions its not possible to guaranteeing property rights.