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The Residential Real Estate Closing Table!
The day has arrived and, for the buyers, their dream of homeownership is about to come true!
During the process they will write checks (or may have pre-written the checks), one of which that will typically be made payable in the name of the title insurance company.
This company whose name they may be hearing for the first time, has been tasked with providing critical protection that ensures they will be receiving good, clean and clear title to their new property.
This is protection for what may be the largest financial commitment of the homebuyers life!
Questions That Need To Be Asked About A New York Title Insurance Provider…
- What is the claims experience history of the title insurance provider,
- Are the title insurance charges appearing on the title bill fair,
- Who is the underwriter being used?
- Does the title insurance company have any Affiliated Business Relationships (ABR) that could create a conflict of interest,
Great questions although many homebuyers, early in the process, don’t necessarily ask them as they leave much of these decisions to their trusted advisor in the process, their real estate attorney.
And they should rely on their attorney, as this professional has the expertise and experience in residential real estate matters, and is working to protect the buyers best interests in what may be a large and often complicated transaction!
But when it comes to choosing the title insurance provider, the residential property buyer has the RIGHT to choose the title insurance company that they would like to use. Or, at the very least, to do some homework concerning this very important protection!
The reality is that all title insurance companies are not the same, much like companies across all business types are not the same. But that said when you arrive at the closing table a title insurance policy will be in place, particularly if a lender is involved.
But the question is, how strong and reliable is the work that was done by that title insurance provider, deciphering all of the property information, and resolving satisfactorily for the buyer any outstanding issues for that policy that may exist?
What Are Some of the Difference Between Title Insurance Companies?
- First and foremost, what is the title claims experience of the title insurance company being used?
While this question is seldom asked, it is extremely important. Has this company in the past overlooked any issues surrounding a property that should have been taken care of before the closing, that may not have been? And did these omissions result in a title claim?
Ask, because one of the more significant purposes of the title insurance company is to ensure that you the buyer, when you close on your residential purchase, are receiving good, clean and clear ownership of that property!
- Are the fees being charged by the title insurance provider on the title insurance bill fair?
After making sure that the title insurance company being used has a laser-focus on protecting you, the buyer, it’s important to make sure that the fees that they’re charging are fair.
This, is an extremely important point!
Your attorney will provide the buyer with a title insurance bill from the title insurance provider being used, that will include many of the costs that you will face at the closing table. This includes the title insurance premium(s), document recording fees, mortgage tax if using financing along with many other fees (any potential taxes due will not be known until close to the closing date).
While many of these costs will be the same regardless of the title insurance company being used (i.e. title insurance premium, mortgage tax, etc.), others fees can and do vary widely by firm, sometimes by as much as $500-$1,000.
To check on the fairness of the fees a buyer can use the Hallmark Abstract Service technology that will allow for a comparison to be made. Or, call any title company and ask them to provide a title bill for the New York county the home is in, the purchase price and the mortgage amount. In other words, always get a 2nd opinion in the same way that we do in every other aspect of our lives. If a significant difference in cost exists, have your attorney go back to the title company and ask them to adjust them down!
- What title insurance underwriter is being used for your title insurance policy? When you buy insurance, regardless of the type, it’s critical that if a claim is put in that the underwriter will have the financial ability to pay! Remember that the claims-paying ability of companies are not created equal! This is certainly the case with title insurance underwriters as was discovered after the 2008 financial crisis. Make sure that only one of the top firms is being used to protect your real estate investment!
- Affiliated Business Relationships describe some financial connection that a title insurance provider may have with another company involved with your transaction, such as the real estate broker. These relationships will be disclosed, but in the opinion of Hallmark Abstract Service they create a conflict of interest. For a homebuyer making what may be the largest financial expenditure of their lives, they want all of their providers to be focused on what is in their (the homebuyers) best interests!
The information concerning title insurance contained in this article will hopefully create a desire to learn more about this extremely important protection, a critical product not often discussed but, when done right, is crucial for any homebuyers peace of mind!
If there are any comments or questions please reach out to Hallmark Abstract Service at the contact information that is provided below.
Hallmark Abstract Service…You Buy, We Protect!
Michael Haltman, CEO
Hallmark Abstract Service
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