Most homebuyers don’t know that they are at liberty to pick their own title company. Under Federal and State law, the payer of the title insurance policy has the right to choose their title company. A lender or realtor may try to influence you to use a certain title company, but legally, the decision is yours. Whether you are a Seller, Buyer, Borrower, or Lender the choice of Title Company can be the difference between a smooth, hassle-free closing and one filled with pitfalls and delays. When choosing a Title Company, you will want to ask some simple questions before making your selection.
What is a Title Company and what do they do?
In short, the Title Company, (also known as the Title Agent, Settlement Agent or Closing Agent) is the company that clears and coordinates all of the contract, financial and regulatory hurdles that go into a closing. The Title Company collects all of the funds associated with the closing, prepares and coordinates the signing of the documents in the transaction, records the conveyance and finance instruments, disburses the Seller’s proceeds and payoff funds to any associated creditors or lienholders and issues the Title Insurance Policy to the Buyer and/or Lender in a transaction.
Title companies are not all “made equal.” The closing fees and title insurance costs fluctuate quite a bit from one title company to another. In addition, title companies don’t all offer the exact same variety of services.
Picking the right Title Company – whether you are the buyer or seller, your choice makes a difference.
There is competition on both sides of a real estate transaction. On the Buyer’s side, thanks to online resources and access to information, there has been a steady increase in savvy buyers looking for well-priced properties which may now be available to them. Attractively-priced properties may have numerous offers, and interested Buyers will want to be careful not to lose out to the competition. On the Sellers side, a Seller doesn’t want to miss out on an interested and qualified Buyer in the face of competition from new construction and existing inventory. Whether you are a Buyer or Seller, you want to know how to make settlement go as smoothly and quickly as possible. With that in mind, we have prepared the following guide to choosing a Title Company. The right choice is a smart way in which you can ensure a worry-free and quick closing.
What are some Questions to ask when choosing a Title Company?
Ask the agent what the expected turnaround time will be for issuing a title commitment or title report. Every transaction is different, but a title agent should strive to get this information out to you as soon as possible. Unless there is some complication in the actual parcel to be searched, it is reasonable to expect a report or commitment within five business days.
Some Title Companies may not have an assigned Closing officer or coordinator to manage your file from beginning to end. In some cases, there may be a point of contact, but their process is inefficient, and staff may be bogged down with files. In cases like this, having someone who will be accountable throughout your closing process is critical. Prompt and effective communication will free you from spending hours in a series of phone transfers and wondering whether your closing will happen or not.
In an effort to combat fraud, some lenders have implemented sophisticated document delivery systems in order to communicate with the Title Company or even to request or transmit documents back and forth without using email. In some systems, the Title Company can receive your loan documents digitally with the click of a mouse. This may prove helpful when you have a last-minute change in the closing documents. What previously caused a delay while waiting for a couriered document package now can be handled within minutes via electronic transmission.
When choosing a lawyer to perform your closing, you will want to ask how frequently the law office handles title searches, how experienced the company is that will be processing your file, and how fast they can get to the finish line with a closing date. Many law offices conduct real estate closings in order to accommodate clients in other subject areas or to generate further business. Even more troubling are the cases where an inexperienced attorney is a person handling the file. A license to practice law does not impart any specific wisdom concerning handling issues that crop up when preparing for closing.
Title Companies and Law offices have fee structures that can be unpredictable. Some Title Companies offer discounts on premiums but charge an exorbitant closing fee. Some firms will add on an hourly fee for their attorney or paralegal to work on the file. Other Companies may not notify you in advance about costs that are incidental to the closing, such as courier fees, wire fees or recording charges. Asking questions about fees up front will prevent a surprise at the closing table. This is also helpful when presenting your choice to the Seller or lender in a transaction. If you come across a title company that can offer you discounts on fees such as title search, closing fees, title insurance, or other fees, communicate that to your lender. They are likely to match those discounted rates. Make sure that you obtain written copies of all quotes, and present them to your lender. It could make a significant difference in your total cost.
Although these are only a few questions to get you started, the more questions you ask, the more likely you will be to have made the right choice for your closing. We invite you to review our credentials and ask us as many questions as you like. At St. Johns Title, our goal is to provide the peace of mind that comes with knowing that everything is being taken care of from the contract to the keys.
