Few things can throw a wrench in the cogs of a real estate closing like finding out the title isn't clear or marketable.
"Title defects surface more often than most people realize," said Ron Richard, Landmark Title owner.
"Investors, house flippers and real estate agents know it because buying and selling is their bread and butter. The average homeowner — who owns three, maybe four homes in a lifetime — if that — might not know there is an issue until they're ready to sell or refinance," said Krystal Delaney, Landmark Title. "It's very frustrating for everyone involved."
The folks at Landmark Title believe every homeowner deserves to know about the importance of a clear title and the benefits of owner's title insurance before they're ready to sell or refinance.
"Last week, we conducted a title search for a re-fi," said Darlene Beard, Landmark Title. "The property owner found out the IRS had a $60,000 lien against a previous owner in her maiden name."
"Now he's trying to figure out how to come up with the money to pay that," said Richard. "If he had owner's title insurance, it wouldn't be his problem. It would be the title insurance company's problem. He'd be free to refinance.
The cost of title insurance averages $400 to $1,000, and is dependent on the value of the property, according to Lori Moreau. The cost is built into the purchase price and spread out over the term of the mortgage. It's separate from lender's title insurance, which covers the lender.
"This information is especially timely," said Lesa Higginbotham, Landmark Title. "We're seeing more transactions because of the recent, drastic drop in interest rates. House hunters are motivated to buy and homeowners are selling or refinancing."
Turnaround time matters
"They all have one thing in common," said Moreau. "They want to close yesterday."
"We pride ourselves on having the quickest turnaround time," said Richard.
He credits the group he's assembled to make sure that happens, a close-knit group of professionals with 120-plus years of experience in the industry.
"I did 350 transactions last year," said Robbie Ingle, Coldwell Banker/Ingle Safari Realty, and a Landmark Title client. "I did 200 of those with Landmark Title. They are amazing. We can order a title, get it back in 48 hours and we're closing, all within the week."
"They've always responded quickly to anything I've requested of them," said Kaysha Sims, Century 21 Bono. They provide clear and concise communication. There is no confusion, no last minute surprises. All of my dealings with Landmark have been professionally and efficiently handled."
Understand title issues
How can someone pay for a house for years, only to find out someone else has a claim against it or the property description doesn't correspond to what they think they own? Title defects result because of filing or clerical errors. Previous owners could have fallen behind on child support, IRS or other payments; the debt stays with the property. Long after the passing of a previous owner, an heir could come forward with a legitimate claim against the property. Land improvements can encroach upon the property of another.
These are just some of the examples of how a title issue can stall, postpone or stop a transaction all together. However, these issues can be covered or resolved when the owner purchases title insurance.
"Why wouldn't you want that level of protection after making such a major investment," Richard asked.