You’ve signed the real estate contract and now it’s time to get down to the business of closing on your new home. That includes arranging for title insurance.
We often find buyers are confused about the whole topic of title insurance. Who buys it, the seller or the buyer? What does a title company do? Is this kind of property insurance really necessary?
Shopping for A Title Company: Who Buys the Title Insurance?
Not even the seller can tell you what title insurance company to use. RESPA, the Real Estate Settlement Procedures Act, is a federal law that prohibits the seller from requiring the buyer to purchase title insurance from a specific title agency.
Real estate professionals as well as family and friends may have recommendations for you. But ultimately, it’s up to you to choose the company you want to work.
Additionally, you also have the right to choose the real estate attorney you want to handle your side of the sale. The seller can also choose their own closing attorney, if they want. Should that happen, this is called a split closing.
Title Company Responsibilities: What are They?
Tasked with keeping the closing on track, good, consistent communication between the title company, the realtor, and the lender is key to closing on time.
What you may not know is that a title company acts as an agent for both buyer and seller, and as the agent of the company providing title insurance. And that’s only part of the job.
Title companies must also:
- Perform title work on the home to be purchased
- Issue title insurance policy
- Manage the escrow and distribute the final paperwork
- Oversee the closing
- File and record all paperwork from the transaction
- Ensure that the survey of property has been done, if needed
- Document notarization
- Obtain payoff amounts
It’s a big responsibility! That’s why you want to choose a company carefully.
How Do I Choose A Title Company?
First and foremost, work with a company that has earned a good reputation with a proven track record of navigating the real estate laws.
Ask the opinion of real estate professionals, friends, and families, and don’t forget to check Google reviews.
- If the company met buyer/seller expectations
- If both parties were treated with respect
- If the company was friendly and kept both parties informed throughout the process
Choosing a company with strong professional experience will help to make the closing a smooth process. Do a phone interview or stop in and meet the team that would work with you.
Remember, you’re choosing a company that will handle one of the biggest transactions of your life. Make sure they have processes in place and the technology that enables them to avoid making mistakes.
Talk to the company about their fee structure. There is no standard in the industry, so talk with them about who pays what.
Do I Need Title Insurance If I Pay Cash?
It really doesn’t matter whether you pay cash or not. Title insurance protects you from what you can’t see like fraud, unrecorded liens, forgeries, undisclosed or missing heirs, and much more.
That’s why it’s so important. In today’s world, the old saying is true, an ounce of prevention is worth a pound of cure.
How Long is Title Insurance Valid For?
You want one that offers a wide range of benefits and will answer all your questions about your coverage.
Make sure your title agent is knowledgeable and wants the right coverage for you.
Purchasing a home is a big step full of legalities. Becoming an informed buyer can make buying a house in 2020 easier when you know your rights.
Are you buying or selling your home? Give us a call at 540-414-8763 and we’ll happily answer all your questions about how we handle title insurance and real estate closings. At Lilly Title & Company, we know that an informed buyer or seller is far more comfortable and relaxed during the real estate process. Learn more about us on our website.