Source
r/Iowa•
Jimbles

Property titles in Iowa

Question

I'm looking at houses to buy and as a new Iowan have discovered that title insurance doesn't exist here. According to this and other sources, the buying process includes attorneys that basically vet the title and work with the sellers to fix any issues before the sale goes through, ensuring the buyer gets a clear title.

How does this work in practice? I understand that a lender won't issue a loan until any title issues are clear. Have there been instances where an Iowa property has settled only for title issues to arise later? If so, who foots the bill for dealing with that?

Posted Jul 9, 2022, 8:21 PM UTC

816
miatamanisback•

You’ll end up getting this enormous stack of paper that tracks your property from the earliest tracking of it that’s on file until now. Kind of cool to look through, just have to keep it safe as it’s quite costly to get reproduced, or so I was told.

I want to say our’s has stuff about land surveys when Iowa became a state as the first pages. I’d have to dig it out and look.

11
JimblesOP•

That sounds really interesting, actually! Guess I'll have to invest in a fire safe.

5
justanotherhistorian•

An abstract! We ended up getting a safe deposit box just for it lol it really is like a huge awkwardly sized tome of papers, super fun to flip through and shows the ownership of the exact property owner by owner. Our realtor also put the fear of god in us about not losing it and the cost of replacement...hence safe deposit box ha!

3
miatamanisback•

Same here. He was adamant about the expense but it’s still in a desk drawer here. It is a rather large format for most home safes. I think that was why I didn’t buy one for it.

3
floorjockey•

You may be able to store your abstract with the attorney who did the title opinion or with the abstract company that updated/created your abstract. Some store them for free.

Banks used to to keep abstracts, but this is not as common anymore.

2
[deleted]•

[deleted]

1
ILikeOatmealMore•

This does seem to be county by county, however. I've gotten the abstract about half the time I've bought, so even this isn't universal.

1
ranhalt•

our’s

ours

-1†
bgle•

See the Iowa Title Guaranty system: https://www.iowafinance.com/iowa-title-guaranty/

​

Here is the specific link to owner coverage: https://www.iowafinance.com/iowa-title-guaranty/owners-coverage/

5
JimblesOP•

Interesting. So how is this different from title insurance in other states, aside from cost?

3
bgle•

I've never bought in another state, but I don't think it's any different... it covers the same things. It isn't for-profit either and excess funds, if any, go to downpayment assistance programs for first time and low income homebuyers.

3
JimblesOP•

That article I linked makes it sound like there's no need for any type of title guaranty in Iowa since the sale of title insurance is forbidden. I guess this just seems like title insurance to me, so I don't see how it's different. I do like the flat fee, and the ability to get owner coverage for free if the lender takes out their own.

Anyway, I'll move on and occupy my mind without about 40,000 other things. Thanks for the assist! 🤣

1
bgle•

Every mortgage I’ve gotten the lender has purchased it so mine was covered free.

3
Chagrinnish•

When you get the title opinion from the lawyer (or your lender seeks out a lawyer for a title opinion) the lawyer is now on the hook for any errors. If a claim does arise the lawyer is fighting it or paying it at his own expense.

2
floorjockey•

To answer the question regarding title issues arising after closing, this is why get an ITG commitment. That acts as insurance against any loss that happens because of a title issue.

For example, let’s say the people who owned the house before you had some small claims judgments, unpaid credit cards are the most common. This should be shown in the abstract and noted on the title opinion as a lien against the real estate. If it comes to light after the closing and you have an ITG commitment, ITG will make sure it the lien gets paid/removed.

The abstract/title opinion process takes longer but generally results in fewer claims/title problems after closing.

2
DrMikeG2•

I sold a property in Madison County. Done deal with realtor and title attorney. 3 MONTHS after closing they "found" a lien that someone at the assessors office "forgot" to put in the computer. Attorney advised me "Sorry, tough luck, pay it"

1
pudgydog-ds•

You get an "Abstract of title."

It should start with a page saying the U.S. government took possession of the land from the natives.

I worked with a guy who hated the system. He swore title insurance was infallible. Like any other system, it is subject to fraud, even by the insurance company.

1