Choosing an experienced real estate agent to help you find a dream home is the beginning of the property-buying process. Finding a professional title company is at the end and is just as important. If you make both choices with care, it will ensure your peace of mind during the most significant financial endeavor in your life. To close the deal on the chosen home smoothly, you need to familiarize yourself with the questions to ask when acquiring title insurance. The answers you get will make all the difference.
Why does it matter to have a title insurance policy?
As part of the search and appraisal process, you have most likely conducted a home inspection. A licensed inspector has assessed the physical condition of the property. But what about the home’s history? You can’t know if there are any claims, liens, or unrecorded deeds posing a threat to your homeownership. However, certain professionals can investigate and protect you against them so that you can move to your New Jersey home safely and problem-free.
If conducting a home inspection provides insight into the present state of your home, then purchasing a title insurance policy protects you against its unknown past. Should anyone ever challenge your right to ownership, title insurance will either legally defend that right in court or compensate you for any losses incurred.
Choosing the best title insurance company
All searches for professional assistance start with the right questions. For example, if you ask your family, friends, and colleagues for recommendations to find reliable movers, the chances are the experts at amplemoving.com will be their choice. Similarly, their recommendations can be very useful for you if they have recently closed on a homebuying deal. Yet, once you get those recommendations, it is still necessary to interview the representatives of title insurance companies. There are several key topics you should inquire about:
- What are your title policy insurance rates and fees?
- How long does it take on average to complete the search?
- What are your controls for protecting clients’ funds?
- Will there be a conflict of interest?
- What was your most complex title search, and how did it end?
- How well is my investment protected?
- What is your claim-to-customer ratio?
Ask about title policy insurance rates and fees
State-mandated rates for title insurance are present only in Texas, Florida, and New Mexico. It means that in all other states, New Jersey included, these rates vary from company to company and sometimes are even negotiable. Apart from this, there are accompanying fees the companies are not always straightforward about. Disclosing the fees upfront in detail is a sign of good practice and one of the critical questions to ask when acquiring title insurance. Why should you ask this first?
After closing the deal, relocation is the logical next step – and a significant expense. Just as you need to find a reputable broker and title company, you’ll need to team up with reliable movers as soon as possible. Even if a long-distance intrastate move is ahead of you, they will help you with transfer to your New Jersey home. As proven in so many cases, partnering with experts doesn’t truly have an alternative. However, revealing all the expenses and fees in advance is a must, regardless of whom you work with.
The time to complete the title search matters greatly
If you’re in a rush to finalize the home purchase, the average time it takes to finalize a title search is significant. Asking the company about it will give you a specific timeframe to rely on when making an offer on a home. Typically, an experienced title company executes the search in about two weeks. If the representative says it takes much longer than that, consider if their company’s a good fit. You may find yourself under a lot of pressure to settle with the seller, so every day counts.
Controls for protecting clients’ funds
Protecting clients’ funds is of the highest importance. Hence, reputable title insurance companies employ internal procedures and controls with that goal in mind. More importantly, a respected title insurance company will be happy to tell you all about the systems they have in place to ensure the security of your funds. If they want you to entrust them with your money, they should present you with controls and policies for keeping that money safe, especially when you ask about them.
Who owns the title company?
Among other things, you also need to look for a conflict of interest when searching for a title insurance firm. Asking who owns or affiliates with the title insurance company will give you a clear picture of whether you should move on with your search. While there is nothing legally wrong with referrals and affiliations of businesses, it may present a conflict of interest. This happens if your chosen lender or real estate company also owns a title insurance company that they recommended to you.
Transparent about challenging title searches
Not all title searches are easy, simple, and fast. How a title company deals with and refers to more challenging investigations truly matters. This is certainly among the questions to ask when acquiring title insurance because it assures you the company will keep the same attitude with your case if the need arises. The success with which title companies resolve issues usually depends on their experience. Also, a title company servicing a specific area depends on good rapport with local clients. They will take great care to disclose the challenges they faced and overcame because it goes in their favor.
Inquiring about the title company’s financial rating
What do Insurer Financial Strength (IFS) ratings determine? Insurance companies, including title insurance firms, typically submit evaluations specifying their ability to pay the claims. This ability is a sign of a company’s financial strength and is represented by financial ratings. The higher the rating, the better the company’s solvency. Keep in mind that rating labels vary between agencies. Thus, cross-compare title insurance companies using the ratings from one agency only.
Know how many claims are too many
Every company relies on specific indicators to evaluate its success, and title companies aren’t an exception. In this case, a claim-to-customer ratio is a strong indicator of their reliability. True, claims are an inevitable part of the process, but they happen more frequently if the search hasn’t been thoroughly performed. A high ratio of title claims to the number of clients signifies that the title company doesn’t do its homework well. If the risk of a claim is too high, a reliable title insurance company will let you know. Others will sign you up anyway. Imagine what happens if they’re not financially strong.
A quick summary
It is in your best interest to find the most knowledgeable and dedicated title firm familiar with the NJ market to assist you and ensure untroubled closing. The right questions to ask when acquiring title insurance will help you prepare and complete a purchase of a lifetime.