I can't help thinking that the unspoken words here were "in the absence of a written agency agreement between the prospective buyer and the agent."
That even if the agent says "I'll be helping you.... Mr. Scott said I should work with you... BY LAW the agent is NOT the buyer's agent.
But I'm sure the general concept of agent and agency has existed in English law for longer than laws like the one you refer to, and I would be surprised if any real estate law excluded it here. I'd be surprised if it prevented anyone from hiring an agent to represent him, in any dealing, and if that agent knew something about real estate, that would be fine too.
Unlike most contracts, contracts for the purchase of real estate must be in writing. So the notion exists that certain contracts have to be in writing, and a seller's hiring a real estate agent could be one of them.
That's what the title search is supposed to find. The odds of the title search missing something that the title insurance will actually cover are extrememly low.
Many banks and Savings & Loans offer free classes on buying a home. Obviously, they want you to borrow money from them but there's no obligation to do so. Classes like these will give you the most basic info on how to get started and who is responsible for doing what.
If you haven't already, you might ask your bank how much they'll lend you - then you've got some idea of what you can afford.
Google How to buy a home + state name.
If you've decided that the house you refer to is the > I am buying a small house not in the best shape but anyway. Never owed > a house before.
Supposed to is the operative word here. And a title search will only find what has been recorded. For example, suppose the seller was a crook and sold the same property to two other people at the same time. It can take a week or so for the title change to be recorded.
The same can be said of fire insurance. Should he skip that too?
Why do you suppose the major corp. wants him to get title insurance?
In case he doesn't have good title and/or someone else challenges it.
That's the same reason the buyer should want title insurance.
Whether he wants to act as a self-insurer or not, one shouldn't tell him that there is no risk.
The title insurance company does a title search to lower its risk -- and I'm sure one can pay for a title search without the title insurance. The records are public. One can go back there himself, look in drawers, get copies made, etc. though I'm sure a newbie woulldn't find everything -- but there is still some risk in writing insurance, risk that they will have to pay out, because even a pro might not find everything, especially if it is not there.
Whether title insurance is more expensive for the risk than other insurance, I don't know, but I'm sure there are reports on that. If it was an especially good deal, why aren't there competitors selling title insurance for less? Even if the reports don't do cost/benefit, there must be figures on how many title claims are brought, and how many are successful, and maybe how much the legal costs are, on average.
One shouldn't bother insuring a 10 dollar, or even a 100 dollar package sent by mail**, because one can act as a self-insurer and the odds are he will make the same profit that the other insurer makes, and if not, he can afford to bear the loss.
One should only insure for losses he can't afford to bear, and the legal fees to defend a title claim, or the loss of the house are things most people can't afford to bear.
**Unless he believes the post office etc. will take better care of something that is insured, so he faces less risk of losing it in the first place. I don't know if they do or not.
Because the corporate lender benefits from lower exposure at ZERO cost. Heh, why wouldn't you get ***** [anything] if you can strongarm someone else into picking up your tab.
Except that the buyer needs to balance the benefit against the actual cost.
Having said all that, I would not personally skip the title insurance. But that doesn't mean it isn't something of a scam -- it is. In CA at least, quite a few title companies have been clobbered by the state for some very shady dealings.
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