Not all title companies are equal; some may be helpful in your real estate transactions while others are not. That's why before you choose a title company to work with you, you should know what exactly you need from a title company to ensure that you end up with the right one.
This might sound like a lot of work but don't worry, we've compiled 12 questions that will help you do this. But first, let's start with the basics.
In the previous posts, we talked about what a title company is about and how it works. Basically, the goal of a title company is to investigate and ensure that the property is legally transferred from the seller to the buyer in its entirety. This means that you legally own the property.
If you want to learn more about title companies and how they work, you can check these free resources:
Now, choosing a title company to work with is easy; you can easily look for title companies online. The challenge is finding the right one, which means working with a company that will look out for your best interest.
Here is some essential information to help you decide on and choose your title company.
1. Is The Title Insurance Company I'm About To Work With A Neutral Third Party?
Any prospective title business should be asked who their client is. The Real Estate Settlement Procedures Act mandates that the corporation reveal if it is owned by lenders, real estate companies, or builders. The reply to this question should always be "you."
2. How Long Do The Title Searches Take?
Two weeks is long enough to complete a title search. The effectiveness of the business is crucial if you have a deadline to meet.
3. How Do They Handle The Title Searches?
There are easy searches and harder searches. You want to know how the business responds to challenging title searches when problems occur.
4. Will You Run A Comprehensive Title Search And Disclosed The Result?
At all times, yes should always be the response. The title company is expected to conduct a thorough inspection of the property and to present official documentation for every exception discovered during the search. Regrettably, some title companies only collect premiums while selling policies.
5. Will Our Money Be Safe?
To protect your funds, your title business needs to implement internal controls, processes, and job segregation. Verify that the company's accounting and escrow departments are staffed to capacity.
6. Will Our Investment Be Protected And Secured?
Buying a house is probably one of the largest investments you will ever make. You have every right to find out the title underwriter's financial situation.
7. How Much Experience Does Your Lawyer Have?
You should find out the attorney's experience level for each title company you are considering. He or she should be well-versed in providing settlement services for real estate. This individual will determine if you can lawfully buy the house or not.
8. Are There Any Additional Fees?
Even though you could be tempted to choose a title company with lower prices, doing so might entail sacrificing essential closing and title services. Other costs that could drive up your expenses over what you would pay with a market-rate provider are money-wiring fees, overnight courier services, electronic delivery, and release tracking fees.
9. Is It Locally Owned Or Operated?
A local title company will be familiar with both the real estate laws in your state and the real estate market you are buying in. However, a non-local company could contract out portions of the title commitment generation and closing processes to another nation.
10. What Is The Company Ratio Of Title Claims To Your Clients?
In the industry, 5% is the norm for claims. If a company's claim rate exceeds this, you should look into other options. Furthermore, a low number of claims indicates that the organization performs comprehensive title searches and can readily handle concerns that arise.
11. Do They Follow The Industry's Best Practices?
Data security, accounting procedures, and settlement services are all covered under the American Land Title Association Best Practices. These procedures aid title companies in safeguarding consumers and lenders. Your title business will adhere to these procedures if it is a member of an association for professionals, such as ALTA.
12. How Long Have The Company Been In Business, And Are They Responsive?
An established business is less likely to face financial difficulties that could lead to its closure because it will have dealt with a wider range of transactions and concerns.
13. How responsive is the company?
Find out if the title business you have selected will respond to your emails and calls, as well as any queries you may have.
Do you still have concerns about choosing a provider of title insurance? We are more than willing to help! Call us at 317-214-6023 or click this to send a message.
Caroline Soriano