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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 have pre-written the checks) that will typically be made payable in the name of the title insurance company providing this critical protection.
Protection for what may be the largest financial commitment of the homebuyers life!
- What is the background of the title insurance company and,
- Are the title insurance charges appearing on the title bill fair?
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, the attorney.
And, this is as it should be because the buyers attorney has the expertise and experience in residential real estate matters, and is working to protect the buyers best interests in what is 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 if your deal is going to close, a title insurance policy will be in place, particularly if a lender is involved.
The question is, however, how strong and reliable is the work that was done by that title insurance provider deciphering all of the information, and resolving satisfactorily for the buyer any outstanding issues for that policy behind the scenes?
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.
Your attorney will provide a title insurance bill from the title insurance provider that will include many of the costs that you will face at the closing table, including 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.
If you have a title insurance bill in hand or if you are first starting out in the homebuying process, Hallmark Abstract Service has developed an app (click the link below) that will allow you to calculate what the costs for a New York residential purchase with or without a mortgage should be. As consumers we check the prices for everything that we buy, why not title insurance as well? And if your attorney is already using another title insurance company, the results from the app at the link below will allow you to go back to ask that some of the fees be reduced
- Finally, what insurance company is being used as the underwriter of 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!
The information concerning title insurance contained in this article will hopefully create a desire to learn more about title insurance, a critical product not often discussed but when done right crucial for any homebuyers peace of mind!
If there are any comments or questions please reach out at the contact information that is provided below.
Michael Haltman, CEO
Hallmark Abstract Service