At Clear Title, we help people make one of the biggest financial decisions in their life: purchasing a home. The closing process can be complex and challenging, so we have developed this Homebuying Horror Story Series to bring to light some of the situations that can arise during this process. Last month we covered what happens if the homebuyer gets cold feet; this month we are focusing on the ramifications of an uninsurable house.

Fictional Situation: Jake

• Single
• Looking to buy first home
• Experienced home remodeler
• Small budget

Jake was ready to stop renting and purchase a home of his own. Unfortunately, he had a limited budget so he began looking for fixer-upper homes that were reasonably priced. This moved his search into more remote areas surrounding the city in which he currently lived.

After an extensive search, Jake found a home that had been neglected for several years. In need of repairs, the home had a variety of issues that could be fixed. Because Jake was a handyman, he felt that he had the skillset, time and motivation to turn the property into a home of which he could be proud.

Jake began moving forward with the homebuying process, getting excited about the prospect of owning his own home. He decided to forego doing a formal title search to save time and money. Everything seemed to go smoothly until he found out that the home was deemed uninsurable due to the structural damage and extensive repairs needed. The property was not eligible for a mortgage through the Federal Housing Administration (FHA) or other private insurance companies due to the high risk.

The only way Jake could purchase the home was to pay cash for the property (in other words, not get a mortgage), but he did not have that amount of cash reserves. Even though Jake knew he was fully capable of fixing the wiring problems, rotting beams and mold, Jake was unable to purchase the home.

Jake might have been able to save himself a lot of hassle by hiring a reputable title company to research public real estate records and determine if there were any potential issues with the property. Although a title company cannot guarantee that a home will be insurable, some red flags might have popped up much earlier in the homebuying process.

Clear Title is a title company in Pensacola, Florida, led by Board Certified Real Estate Attorney Stephen R. Moorhead. For over 30 years he has honed his skills in real estate closing and built a team of experienced, trustworthy experts to keep the horror out of homebuying. When you trust Clear Title, you’re getting 100s of years of combined experience in your homebuying court.

To schedule a meeting with our experts and explore our Pensacola title services, contact us today at (850) 202-8518 or visit ClearTitlenwfl.com.