Why Choosing the Right Cover Agent Will Make or Break Your Sale
Having a clear title is critical to any real estate transaction. However, as a buyer, it can be difficult to understand what exactly a title is and how it will affect sales. With that in mind, I brought in an expert to clear things up. I spoke to Nate Baker, the founder and CEO of Qualia, a real estate technology company, to talk about the importance of choosing the right title agent, and how that move can make or break your transaction.
Here is what he had to say:
Tara Mastroeni: Can you briefly explain what the title is?
Nate Baker: “Title” refers to a person’s statutory right to own and use real estate. It also refers to the legal documents that show the ownership history of a property and, in general, define the boundaries of the property as well as its use.
Since ownership of a property cannot be easily tracked by its residents (i.e., tenants), the title helps clarify who owns a particular property. These proofs of ownership are deposited with the local authorities so that it is clear who the legal owner is every time the property is bought or sold.
Having hassle-free titles where you can trace all previous proof of ownership is known as a “clean title”. It’s a requirement for most sales as it ensures that the home you’re buying is actually yours.
Mastroeni: What role does a title agent play in the transaction?
Baker: The title agent plays one of the most important roles in making the deal easier from start to finish. Title agents not only work to ensure that the seller owns the property they are selling (clean title, as mentioned), but they also help the buyer get property insurance to protect them in case the title is theirs House title is in question after the purchase is complete.
In addition, title agents work with the lenders, real estate agents, buyers, sellers and all other transaction participants to ensure that the required documents are correctly completed, signed and filed. In many states, the title agents are also directly responsible for collecting all the money – which can often represent a person’s savings – is transmitted correctly.
Mastroeni: Why is it so important to choose a title agent? Who will choose?
Baker: In general, buyers and sellers leave the choice of a title agent to their lenders and real estate agents because they have likely established a relationship with a title agent they know and trust.
Choosing a trustworthy, responsible, and reputable title agent is important for a number of reasons. First and foremost, they coordinate one of the biggest purchases of your life. If they don’t have solid processes or technology to enable them to avoid mistakes, your completion may be delayed – or worse, your purchase may not be made correctly, which would affect your statutory rights to the property.
In extreme cases where title agents are also managing the withdrawal of funds, problems due to errors or fraud could arise and the funds could be put at risk. For example, according to the FBI, nearly $ 1 billion was diverted or attempted to be diverted from real estate transactions in 2017. These attempts are often made through Business Email Compromise scams, in which a hacker defrauds the parties to the transaction via email. A good cover agent uses a secure communications platform that avoids relying heavily on unsecure email communications.
Mastroeni: What are some signs of a good title agent?
Baker: A good title agent does two things well: efficiently coordinates the transaction and provides remarkable customer service.
Lenders and real estate agents have invested heavily in technology for years. However, until recently, not much attention was paid to the technology that supports the title agent’s functions – and buyers – Graduation experience. With the use of modern, cloud-based technology, title agents have become much more efficient.
Anyone who has switched to modern technology can communicate easily and securely with their customers, keep them up to date on the status of their closure in real time and avoid unnecessary errors that all too often happen when their own internal processes are too stressful.
Mastroeni: What are some warning signs of a not-so-good title agent?
Baker: Finding a title agent who isn’t giving you the closing experience you deserve is pretty easy. A house closure should be something that you celebrate, not fear.
Some of the red flags to look out for include if they refuse to facilitate secure communication, fail to give clear instructions about the different stages of your closing process, or have received a number of complaints from previous clients about the accuracy of their work.
Mastroeni: How would anyone find a good title agent?
Baker: Your real estate agent or lender should develop relationships with various title agents as they work very closely together throughout the closing process. If you trust your team, you will likely trust the agent choice too. In addition, many title companies have reviews for buyers and sellers online that they can review in advance and discuss with their broker and lender if they have any questions.
Mastroeni: Is there anything else you think buyers should know about titles?
Baker: According to some estimates, up from 30% of all land titles have defects – This means that ownership may not be clear or that action must be taken to make it happen. Buyers should research the process as much as possible before it begins.
Buying a home can be stressful, but it doesn’t have to be. Take the time to learn some vocabulary so you understand what all of the people who work with you on your home purchase will not be afraid to ask questions when they come up.