What Do You Look for in a Title Company?
In Virginia buyers have the choice of title companies to settle on the purchase of your new home. Sometimes a listing agent will say "you must use our title company" which is untrue. This post by Margaret Woda provides a great outline of the qualities that as agents we look for in a title company to recommend to our clients.
An on-time, hassle-free settlement would be the short and sweet answer to that question. But that wouldn't make much of a blog post, would it? So let me be more specific about what I expect from a title company to assure an on-time hassle-free settlement for my clients (and me).
Order the title, payoff and survey immediately after receiving a title order, so they can review the paperwork well in advance of the scheduled settlement.
- Promptly set up the date and time of settlement with the lender, so the lender's settlement department will be ready a day or two in advance of settlement.
- Review those documents when they're received, so any concerns can be addressed well in advance of the scheduled settlement.
- Promptly provide the title binder to the lender upon completion of this review, to avoid any unnecessary delays.
- Keep me "in the loop" from beginning to end of the transaction. I do NOT want to hear from my client that the title company notified them of a problem. I want to learn it from the title company myself, and have an opportunity to help resolve the matter without any added stress to my client.
- Request preliminary instructions and charges from the lender so a HUD-1 estimate can be provided to me at least 24 hours prior to settlement - (read between the lines: the agent should provide this to his/her clients, NOT the title company). Of course, there probably are some agents who are perfectly happy to have the title company give this information directly to the clients, but the title company should not do that without the agent's knowledge and approval.
- Notify the agent if a delay in settlement is anticipated, even if it is just an hour. The buyer or seller may need to make alternative arrangements with their child-care provider or their mover, so the earlier the notice, the easier it will be to make these changes.
- Provide an attractive and relaxing waiting area with ample seating. Hot or cold beverages, depending on the season, are always appreciated by agents and clients alike.
- Provide an attractive and professional environment for conducting the settlement. I avoid taking my cases to settlement at places that stack piles of files within sight of the waiting or settlement area.
Disburse the proceeds to seller at settlement. This is allowed in my area, although I know it is not in some other jurisdictions. If it isn't allowed, be sure to provide a realistic estimate to all parties of when to expect disbursement and how it will be made - i.e., direct deposit to the seller's bank account, seller come back to pick up the check, the check will be provided to the agent to deliver, etc.
- Make the payoff immediately, so seller is not charged a single extra day of interest. I prefer title companies that "overnight" the payoff, even if the seller pays that charge - it's usually less than one day's interest.
- Record the deed promptly, process and return paperwork to the lender, and make all disbursements to the surveyor, title abstractor, HOA or Condo Associations, water bill, etc.
- Record the release immediately when it is received from the lender. Failing to do this could result in problems for both the buyer and seller (who would, no doubt, consider me the perfect scapegoat).
- EDIT ADDED - James Engel commented as follows: "Pulling detailed the first time, requesting CFO (certificate of occupancy) at the prelim time, providing underlying docs for any cloud on title with the prelim, pulling permits if there is a discrepancy on sq ft from assesor and city are among other things that I would tag along". These are important additional steps if the property is new construction. I don't handle new construction so I failed to include this in my original list. Thanks, James!
'Much as I want a smooth settlement for my clients, I do have an ulterior motive. I want the title company to make me look good. With that in mind, it doesn't hurt if the settlement office slips in a compliment for me at some point during the settlement... Perhaps "Margaret's settlements always go smoothly because her contracts are so detailed" or "Margaret's follow-up has been wonderful, and that's one of the reasons your settlement went so smoothly."
After all, settlement is the last step in my client's home purchase, and this experience may be the one they remember - correction, it WILL be the one if it goes badly, regardless of how well everything else went.
I make it a practice to provide my clients with the contact information for three title companies, but I admit to having a favorite. That's Crofton's Capitol Title. They do all of these things well, AND they waive their fees for active duty military. Thanks, Capitol Title!
FIND A HOME IN CROFTON, DAVIDSONVILLE, ODENTON, GAMBRILLS, ANNAPOLIS, BOWIE
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