You are about to make what is likely the largest investment of your life — a piece of real estate. In Idaho, selection of the Title Company is the buyer’s. Title is the right to use your property as you see fit. Any restrictions on its use will be recorded as a condition, covenant or restriction. A title report will reveal these CCRs as well as any number of easements which provide access to your property. Title insurance guarantees the rights of the property owner and is often paid by the seller of the property to warrant to the purchaser that they are protected from defects and will have unencumbered title. If the buyer encumbers the property, the lender will require a second policy to protect their interest in your real estate.
Even though many title companies in our area buy their title insurance from the same provider, the level of service provided varies greatly. Some are very efficient and communicate exceptionally well with all parties involved in the transaction, while others take a more casual — even cavalier — approach to your investment. Whether buyer or seller, you owe it to yourself to review the title company suggested as the one responsible for insuring and closing your transaction. Since it is the buyer’s choice, it is the buyer who should be comfortable with the insurer and request that particular company in the Purchase and Sale Agreement.
Your broker will likely recommend a title company to you, but it is wise to ask why they prefer that one. “Because I have always used them” or “We went to school together” or “We golf together every Wednesday” are not good reasons. Remember the decision to buy real estate is a huge one. You should be prepared to ask some questions of your agent that go a little deeper. How does the suggested company like to communicate? Do they phone, fax, email or text pertinent questions and documents? If you think email is an antiquated way to communicate, would you use a company that still faxes documents?
Is there a particular escrow officer or closer that your agent or broker recommends, and why? Does that person stay in touch from opening to closing of escrow? What type — and at what frequency — will that person communicate? When should you expect to hear from that person if at all? Do they have a history of discovering transaction challenges early and dealing with them head on? How often are your agent’s transactions closing on time or prior to the agreed upon closing date? How often are there last-minute details that cause the parties to scramble for information requested by the title company that could have been addressed sooner but delay the closing?
The buyer gets to choose the company, but the seller has a right to object if they feel the transaction will be better served elsewhere. If a seller questions their agent or broker and finds there have been challenges in the past with the buyer’s choice, the seller may ask for a different company to close and insure the transaction in a counter offer.
Just like real estate agents and brokers, and doctors and lawyers, not all title companies are created equal. As with all aspects of your real-estate transactions, do a little homework and ask some direct questions before agreeing to the first title company suggested.
Trust an expert … call a Realtor. Call your Realtor or visit www.cdarealtors.com to search properties on the Multiple Listing Service or to find a Realtor member who will represent your best interests.
Kim Cooper is a real estate broker and the spokesman for the Coeur d’Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d’Alene Association of Realtors, 409 W. Neider, Coeur d’Alene, ID 83815 or by calling (208) 667-0664.