Why does it matter who you chose to close the sale of your home?
- A lot of people don't know this, but title companies play a vital role in the sale of a home. A title company generally acts as the combined agent of the buyer, the seller, the lender, the insurance company, and any other parties related to a real estate transaction. They review title, issue insurance policies, facilitate closings, and file and record paperwork. A title company makes sure that the title to a piece of real estate is legitimate, has a clear title, and then issues title insurance for that property. Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from disputes over the title.
Here are a some tips below for the most common roles & parties in a Real Estate transaction.
-REALTOR® – As a Realtor, it is important to establish a good working relationship with a title officer. By establishing this connection, you will learn the title officer’s services that they offer, and they will get to know your expectations as a real estate professional. A good working relationship is essential for a smooth closing, and it helps to establish trust. When handling a real estate transaction as a Realtor, it is ESSENTIAL that you have a good title officer that you know, like and most importantly, TRUST to handle the sale of your home.
-CONSUMER – Closing a real estate transaction can be stressful, so you want someone who has worked with your broker successfully before, who can perform at a high level, and can get you to the finish line as quickly and smooth as possible. Each title company has different policies and can handle business different ways from one another. You do not want someone who doesn’t watch out for the details, and can close on time. Failure to pay attention to detail can cost you in the future and you may be forced to file claims again the title company for failure to follow the careful steps involved in the transaction process. Make sure you choose a Realtor who has a Title company that they trust to handle your transaction.
What are the differences between title companies? Liberal and negligent policies in how a title company works, can result in claims. There is a wide gap between experienced escrow officers and new escrow officers; make sure that their infrastructure is localized. Some title companies have their records serviced overseas, and that can cause issues. Have the title company do in-house research, and choose a reputable title company that has been around for awhile locally, and knows what they are doing.
Funding and recording - There can be wide differences in how efficient a title company’s closing and funding processes are. This is very important because it can mean all of the difference in getting the keys to your home on time, or late. This all falls back on choosing someone that you have worked with before, and that you trust to have the work completed efficiently and on time.
Do title company fees vary from company? The fees that title companies charge in a closing have varied in the past, but since the CFPB regulations a few years ago, the pricing is more standardized. The only thing that a title company has discretion over is the closing fee. The closing fee is posted at the Office of the Superintendant of Insurance in New Mexico. How about special assessment and pro rata search charges? The City files a lien if they are assessed now, so these should not be charged. Pro rata data searches are for only one thing, and that is if you are not hooked up to City services (gas, water, sewer). Pro Rata charges would only be appropriate if the property is not in the city. Some title companies will have hidden fees that are considered junk fees, so please check your fees and go over them with the title company in as much time in advance as possible.
Title insurance - Some companies will perpetuate the idea that you have to close your sale of your home, at the same title company where you closed for the purchase of your home, in order to be able to get a discount on Owner Policy. This is NOT true. All title companies are required by law to offer the discount. A good title company will look up prior policies to 1997 in the shared title plant, so rarely do you need your own copy.
As you can see, the choice of title company is very important. Do your research, and choose your Realtor wisely!
For more information and a free consultation to find out more about how to close a real estate purchase or sale, feel free to contact me today!
Steffan Walters - [email protected]