Before you take ownership of a new home, it’s important to obtain title insurance. Most lenders require that you purchase title insurance to protect their investment. It also protects you if any issues come up with the title, such as liens or unpaid taxes.<\/p>\n\n\n\n

Choosing a title company is one of the more critical decisions you will make when buying a home. The title company is crucial in every stage of a real estate purchase from the title search to the closing process. The title company is also responsible for securing your funds, so you will want to ask these very important questions of the companies you are considering.<\/p>\n\n\n\n\n\n\n\n

12 Questions to Ask<\/strong><\/h3>\n\n\n

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1. What are your title insurance rates?<\/strong><\/li>\n<\/ol>\n\n\n\n

   Even though the average cost of title insurance is around $1,000, rates can vary widely depending on the value of the home and whether you live in a state where title insurance rates are regulated. There are two types of policies: the owner’s policy and the lender’s policy. Both are needed and who pays for what depends on the state that you live in. Sometimes the buyer will pay for one, and the seller will pay for one. When you ask this question, you’ll also want to ask what other fees might be applied besides the premium. A lower price from one title insurance company may only mean that more charges will be tacked on later.<\/p>\n\n\n\n

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   1. Is my money safe?<\/strong><\/li>\n<\/ol>\n\n\n\n

      Knowing how your escrow funds will be handled is very important. You need to know that the title company has adequate controls to offer protection for your funds. Make sure the company has a fully staffed escrow and accounting department.<\/p>\n\n\n\n

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      1. Is my investment protected?<\/strong><\/li>\n<\/ol>\n\n\n\n

         It’s not only important to make sure your funds are protected, but also important to make sure your investments are protected as well. Since a real estate purchase is probably the largest purchase you will ever make, it’s appropriate to ask about the underwriter’s<\/a> financial stability. Independent rating companies such as Demotech, Inc<\/a>, can give you an idea about the financial health of the underwriter.<\/p>\n\n\n\n

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         1. Are you a neutral third party<\/strong>?<\/li>\n<\/ol>\n\n\n\n

            You want to make sure your title company doesn’t have a conflict of interest. For example, some title companies are owned by lenders, real estate companies or builders. The Real Estate Settlement Procedures Act (RESPA)<\/a> dictates that the title company must disclose this information. You want to make sure the title company is providing services consistent with industry standards and similar to competing title companies.<\/p>\n\n\n\n

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            1. Do you conduct thorough title searches and report all exceptions?<\/strong><\/li>\n<\/ol>\n\n\n\n

               Be sure that the title company does a thorough search and examination of the property according to the law and that you receive recorded documents for any exceptions.<\/p>\n\n\n\n

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               1. What has been your most challenging title search, and how did you handle it?<\/strong><\/li>\n<\/ol>\n\n\n\n

                  Asking how your title company handled their most challenging title search will give you insight into how they might handle yours should an issue arise.<\/p>\n\n\n\n

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                  1. How much experience does your title insurance attorney have?<\/strong><\/li>\n<\/ol>\n\n\n\n

                     You want to make sure you are working with a seasoned attorney, since that person will determine whether you can legally take the title of your new home.<\/p>\n\n\n\n

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                     1. What’s your company’s ratio of title claims to customers?<\/strong><\/li>\n<\/ol>\n\n\n\n

                        Find out how many claims your title insurance company has paid relative to their volume of business. The industry standard on claim rates is 5%, so for example, if the title company you are looking at has paid a claim for 1 out of every 10 customers, you’ll want to move on to another title company.<\/p>\n\n\n\n

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                        1. On average, how long does it take for you to complete a title search?<\/strong><\/li>\n<\/ol>\n\n\n\n

                           If you’re under a tight deadline to get to closing, this is an important question to ask. A delay in your title search can cause a delay in your closing and ultimately prevent your home sale from going through.<\/p>\n\n\n\n

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                           1. Do you belong to any professional associations?<\/strong><\/li>\n<\/ol>\n\n\n\n

                              Memberships in organizations such as the American Land Title Association(ALTA)<\/a> add a layer of credibility to your title company and also hold them to a higher standard.<\/p>\n\n\n\n

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                              1. Are you locally owned and operated?<\/strong><\/li>\n<\/ol>\n\n\n\n

                                 Some title companies outsource the production of the title commitment and some portions of the closing process overseas. A locally owned title company is better acquainted with the real estate market in your area. Plus, you will get faster responses to any issues that come up.<\/p>\n\n\n\n

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                                 1. Does your company follow the title industry’s best practices?<\/strong><\/li>\n<\/ol>\n\n\n\n

                                    Best practices for title companies have been created by ALTA and ensure title companies enact policies and procedures that protect lenders and consumers.<\/p>\n\n\n

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                                    If you still have questions concerning title insurance, we’d love to help! Reach out to us at 571-234-5589 or info@ratifiedtitle.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

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