Title companies generally act as the combined agent of the buyer, seller, real estate agents and mortgage companies related to a real estate transaction. The title company reviews title, issues insurance policies, facilitates closings and files and records paperwork. Title companies review public records related to real estate and inform all interested parties of the status and condition of title to the subject property.
Title companies are often the closing agents for real estate transactions as the agent for each party to the transaction. In its role as agent, the title company obtains signatures on all closing documents and receives and distributes payments related to the conveyance transaction. After all parties have signed the pertinent documents, the title company will record documents in the local county land records office.
Title companies issue policies of title insurance on behalf of title insurance companies. The title company acts as an independent agent of the insurance company for issuing the title policy.
Yes. A professional search tells you and a lender the property is insurable. Because of laws enacted to protect the rights of the owners and heirs to a property, combined with the rights of lien holders, municipalities, and other governmental agencies, research on a title has become a necessity. However, even after extensive research, the main protection an owner or lender has against risk is through the purchase of a title insurance policy.
Title insurance ensures that you have complete ownership of a property after you purchase it. While this may sound like an obvious consequence of a completed real estate transaction, it’s not: because transferring title to property is relatively easy in Tennessee, all one must do is draft a legal deed and sign it. While every state and local government has provisions that allow you to record such deeds, in most cases recording a deed is NOT absolutely necessary to make the transfer of property both legal and valid. Thus, there’s always a real chance that months or years after you purchase a property, one or more long lost family members will come out of the woodwork claiming that your purchase was invalid because the former owner transferred the property to them first.
Title insurance protects your significant investment in a property you purchased by covering any losses or damages that may result in defects in your legal title to a property. Without title insurance, if there is a defect in title, a person can lose any ownership interest he or she thought they had in the property without any compensation or method of redress.
A lender’s policy only protects the lender’s interests, not yours. And, it only goes into effect if the lender takes possession of the property through foreclosure or some other means.
A basic owner’s policy, such as the one we offer, protects you against issues that occurred prior to your purchase date, but have not yet been discovered. For example, it can protect you from previous owners making a claim of ownership on the property, or a special assessment or unpaid property tax that was not found at the time of purchase.
The enhanced owner’s policy* at Southland Residential Title offers more comprehensive coverage. It includes everything the basic policy covers, and also protects you against situations like prior building permit violations, claims against your property that may occur in the future, and more situations.
Any number of problems that remain undisclosed after even the most meticulous search of public records can make a title defective. These hidden “defects” are dangerous indeed because you may not learn of them for many months or years. Yet they could force you to spend substantial sums on a legal defense, and still result in the loss of your property. These are just a few examples of what can make a title defective and why you need title insurance.
The most common situations covered by title insurance are: forged deeds, inaccurate property legal descriptions, heirs claiming an interest in the property, unpaid taxes from a prior owner, no right of access to and from the land, or when someone else has filed a lien against your title.
Tennessee’s “Good Funds” law requires that any aggregate amount in excess of $1,000 must be in the form of a cashier’s check payable to Southland Residential Title, LLC, or wired to our escrow account. Please contact us for our wiring instructions. If aggregate funds are less than $1,000, then a personal check is acceptable.
Although every transaction is unique, in our experience the closing typically lasts around thirty minutes for a seller and around an hour for a buyer.
If you are buying with a new loan, your lender will be able to give you “loan estimates” of your closing costs and down payment. We, as your closing agent, can give you an exact figure once the lender has provided us with the final loan instructions and closing package. Sometimes these instructions are not provided until a day or even a few hours prior to closing.
As a seller or as a buyer without a new loan, our office would be able to estimate the cost for you in advance of the closing, but final figures may not be available until we have accumulated information such as the exact amount of seller closing costs used (if applicable), insurance premium, title work, tax information, termite and pest inspection fees, surveying fees, or assumption fees (if any), etc. Once again, this information may not be available until immediately prior to closing.
The Settlement Statement is the document prepared by the title company at closing which shows where all of the money in the transaction is coming from and going to. It gives a ‘financial picture’ of the closing transaction. At closing, the title company is responsible for preparing the ALTA Settlement Statement in accordance with the contract, lender’s instructions, market practice and state and federal laws.
The closing costs are based on the purchase price or loan amount of the transaction. Therefore, the cost varies because of recording fees, transfer and indebtedness taxes, and title insurance premiums all increase as the purchase or loan amounts increase.
We require the above-mentioned entities to provide us with documentation during the closing process that reflects the entity in good-standing status with the state they’re located in as well as authority of members within the entity to sign on behalf of their organization.
For LLCs, we require:
For corporations, we need:
For Trusts, we require: