This is built into my acquisition price. Across hundreds of transactions, I have yet to experience a loss. I’m effectively self insuring against the risk, vs the cost I would’ve paid for title insurance (which would work out to tens of thousands of dollars in aggregate).

Property tax payment status, divorce cases, mortgages, and mechanics liens are all public record and can be searched for as part of researching a property. If the claim is public, I can settle it as part of the transaction on the settlement sheet with the settlement agent (who will disburse funds accordingly and handle recording/releases in concert with my real estate attorney). Unrecorded potential claims against the property are very rare in my experience. That isn’t to say it can’t happen, but only that if it does, I’m likely still coming out ahead over the long term.

The rest of the stuff would essentially require intentional fraud by the seller. You’d be able to recoup most of those costs via court. Annoying for a private individual, but I tolerable as part of a portfolio.

I’ll be real, you can pretty quickly tell the type of person you’re dealing with in a home sale. The people who have a tendency to “trash their title” also show other signs of untrustworthiness during the transaction.

Not covered by title insurance.

>Or if they are beyond on their property taxes?

Specifically not covered by title insurance.

>Or going through a messy divorce?

Not covered by title insurance, nor would this scenario matter since the owners are known.

>Or get an unexpected large medical bill that finalizes as a financial judgement against them?

Not covered by title insurance.

Hope I cleared that up. Title insurance is a legalized scam with a market cap in the billions.