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Why Choosing the Best Title Agent Is Important

Thursday, June 11, 2020

Goldman Sachs believes that around 30 percent of all property titles have a deficiency.

For any prospective property owner, knowing that your claim to property that you pay for is indisputable, is a must. You have to avoid making purchases that become problematic down the road. Thus, properties buyers rely on title agents to protect their interests.

Here’s a look at why you need a title agent if you plan on buying an investment property.

What Is a Title?

You can't understand what title agents do before you grasp what a title is. The term ‘title’ refers to one’s legal right to possess and use a property.

The term can also refer to the legal documents that denote the ownership history of a particular property. Such a record will also define the boundary lines of a specific piece of property along with how the owner is permitted to use it.

You shouldn't confuse this with a deed as the latter is a document that exists solely to signify the transfer of ownership from one party to another.

When you have a title that is free of any problems and of which you can trace all previous owners, it's referred to as a ‘clean title.’

A clean title is a non-negotiable requirement when purchasing a property. That way, you know that you'll be purchasing a property you can actually own.

What Is a Title Agent?

Title agents help you facilitate the process of purchasing a property from start to finish. You can say that title agents are in the business of insuring expectations during the property-purchase process.

For the buyer, the expectation is to purchase a piece of property with a clean title to avoid ownership issues. On the other hand, the lender expects to have an enforceable and valid lien on the property they are facilitating you to buy.

Title agents ensure that any issues that crop up with the title get fixed and that the lender receives an enforceable lien.

On the buyer’s front, title agents ensure you get the right title insurance policy that offers you protection if the title comes into question. In regard to lenders, title agents work to ensure documents are correctly filled and filed.

Why Title Agents Are Crucial to the Sale

Since the input of title agents directly impacts the validity of your ownership of the property, it’s ill-advised to conduct the transaction without them.

To begin with, title agents scour real estate records across the country to ascertain the actual ownership state of a piece of property.

If there are any hidden issues with the mortgage, outstanding taxes or liens, you can trust title agents will find that out before a sale.

Other issues that an agent will be looking for are any existing leases on the property, easements, or legal restrictions.

After an agent finishes running research on the property in question, they'll issue a ‘title opinion letter.’ Essentially, this letter is a report that will either detail the issues in the way of the sale or clear the title.

The beauty of involving title agents is that they don’t leave you to deal with any obstacles to the sale. They can work to resolve all issues that are blocking the transfer of ownership of the property.

When every knot has been untangled, the agent will help prepare the necessary legal documentation. That can include explaining easements, leases, or other pertinent issues to all parties in the transaction.

Another critical role that title agents play is preparing the closing statement. That document details the legal aspects of the transaction every party involved needs to know before finalizing the sale.

In certain scenarios, title agents also collect money from the buyer to pay the seller and settle all other expenses related to the transaction. Once this is done, the agent will record all legal documentation at the county level and give the new owner the deed to the property.

Factors to Consider When Choosing a Title company

The best time to evaluate prospective title agents is before the purchase process begins. At that point, you have time to assess the capabilities of each candidate and pick the agent that will take you through the purchase process.

Here are some factors to consider when you're reviewing potential title agents for hire.

1. Familiarity With the Latest Technology

An agent who is conversant with the latest technology that can apply in the purchase and closing process helps make the entire transaction efficient and safe.

Knowing how to rely less on paper and more on technology can make it less time consuming to sign the many documents involved. It also reduces the amount of money you will spend on postage, which lowers the overall transaction costs for you.

In situations where an agent is handling the funds, you must focus on the cybersecurity measures they have in place. That's because nearly $1 billion in real estate transaction funds was being diverted away from the intended purpose as of 2017.

Thus, exceptional title agents are now investing heavily in secure communications to ward off business email compromise attempts.

2. Excellent Communication Skills

The core of an agent’s purpose is to coordinate between various parties in the transaction. As such, title agents who don't have excellent communication skills hamper the process and potentially expose you to unnecessary liability.

If you're struggling to get timely information from an agent during the interview process, it’s likely an indicator of deficient communication skills.

3. Exceptional Customer Service

Reliable title agents are those that deliver remarkable customer service through meeting crucial deadlines. If you have any requests for an agent, you rely on them to fulfill those as intended.

Thus, one of the vital duties you need to do is check for reviews from past clients. Depending on the feedback available, you can gauge how effectively an agent can deliver on customer experience.

Buy Property That's Free and Clear

For many prospective property buyers, purchasing property only for your ownership to be contested is the stuff of nightmares. To avoid such a fate, you should never buy property without knowing how to choose a title company that can look after your interests.

At Heartland Abstract, our title insurance firm has a combined experience of more than 70 years in the industry. Talk to us today for title insurance services that put you at the center.

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