Wednesday, November 04, 2009

Why Buyers Should Choose the Title Company

In the State of Florida, who ever pays for owners title policy can select the title company. Paying owners title policy is a negotiable item in the contract. In the Central Florida area it is customary for the seller to pay for owners title insurance and seller chooses. There are vary degrees of quality & competency of title companies from excellent to poor. If the seller chooses, buyer is not knowledgeable of quality of the title company or title insurance carrier. We find discount title companies affliated with REO properties or short sale facilitating companies are some of the worst. We believe if the buyer can negotiate to pay for their owner title policy and select a title company that is competent, through, detailed oriented, problem solving and have an A rated title insurance carrier, it is always in the buyers best interest. Here are some things a buyers should consider.
  • Financial strength of the agency and underwriter is a major importance to the buyer. We have seen many REO affliated title companies use B, C rated underwriting companies. Legitimate business savy title companies will not comingle escrow money with the companies operating money, so if they go out of business your money is protected.
  • The buyer will ultimately be the one to have to deal with the issue of a claim, not the seller. If someone makes a title claim it important to have a financial strong title insurance carrier. The seller no longer cares, they have the buyers money and have moved on.
  • Willingness of the agency/underwriter to acknowledge responsibility for the error. We have had a title company not request estoppel letter on a property and title company took a guess, and cost the buyer thousands of dollars after closing. Requesting an estoppel letter is title work "101". And yes, the title company did not correct or acknowledge any wrong doing.
  • Timely settling of the claim. When you have a problem, you want to make sure the title company and title insurance carrier representing all your best interests timely.
  • Amount of Errors and Omissions insurance carried by both.
  • The Buyer will not be able to sell the property until they have clear title. Problems with incorrect title work will be discovered when buyers are going to refinance or sell their home. Those would be the worst times to deal with correcting a title problems, as you jeopardize buyers for the home or best interest rates for refiance.
  • It is buyer's lender who will be working closely with the title company to bring the transaction to closing. Buyers lender is a major component to get a buyer to closing and working with a good title company who will be proactive to ensure closing is done correctly and on time.

If a buyer cannot negotiate to pay for owners title insurance and select a competent title company we recommend the buyer hire an attorney to fully represent them through the process of title work or at least review the closing package. We are in a different real estate enviroment than years ago.