Title agents, closers, and attorneys are essential members of your real estate investing dream team when it comes to closing on your first investment property.
They ensure that the legal transfer of the property happens smoothly and that your ownership is protected.
Their role is critical in making sure the transaction is legitimate and that you’re protected from potential legal issues related to the property title.
What Do They Do?
Title agents and closers facilitate the legal transfer of property ownership by conducting a title search, ensuring that you’re receiving clear title to the property, and managing the closing process.
Attorneys may be involved to handle more technical legal aspects, such as reviewing documents and providing additional oversight.
Here’s what they typically handle:
- Title Search and Examination – The title company conducts a detailed search of public records to confirm that the seller has clear ownership of the property and that there are no liens, judgments, or claims that could interfere with the sale.
- Issuing Title Insurance – After verifying the title, the title company issues title insurance, which protects you against future claims or disputes over the property.
- Preparing Closing Documents – Title agents and attorneys prepare the necessary paperwork for closing, including deeds, settlement statements, and legal forms required by your lender.
- Managing the Closing – They oversee the signing of all documents, manage the transfer of funds, and record the transaction with the local government to ensure that ownership is legally transferred to you.
When Do You Involve Them?
Title agents, closers, and attorneys are involved once your offer is accepted and you’re under contract.
After that point, they will start the title search and begin preparing for closing.
Your real estate agent usually coordinates with the title company to ensure that everything stays on schedule, but the title company and attorney handle the legal aspects of the closing.
Why Are They Important?
Ensuring that you have clear title to the property is vital.
Title agents and attorneys make sure there are no unresolved issues, such as liens or ownership disputes, that could come back to haunt you later. Title insurance protects your investment from claims that could surface after the sale, which can otherwise lead to legal battles or financial losses.
Here’s why title agents, closers, and attorneys are key:
- Verifying Clear Ownership – They confirm that the seller has the legal right to transfer ownership and that no one else has a claim on the property.
- Title Insurance Protection – Title insurance protects you from legal claims or ownership disputes that could arise after closing, covering your investment for as long as you or your heirs own the property.
- Managing Legal Aspects of the Closing – They ensure all legal documents are properly signed, recorded, and filed to transfer ownership to you.
Title Insurance: A One-Time Premium
One of the key protections you’ll receive is title insurance, which is typically a one-time premium insurance policy. This policy generally protects you for as long as you or your heirs own the property against future claims related to the property’s title. Whether it’s an undiscovered lien, an ownership dispute, or an error in the public record, title insurance often ensures you’re not financially liable for resolving those issues. However, it’s important to review the specific terms of your policy, as coverage can vary.
Owner’s Extended Coverage (OEC)
In addition to standard title insurance, you should seriously consider purchasing Owner’s Extended Coverage (OEC) from your title insurance company. OEC provides broader protection than a standard title policy, covering potential risks that might not be discovered during the title search.
Here’s what OEC typically covers:
- Unrecorded Liens – OEC protects against liens or claims that weren’t found during the initial title search but could affect your ownership.
- Boundary Issues – It covers disputes over property boundaries, which can be especially valuable if there are concerns about fences, driveways, or outbuildings near the property line.
- Zoning Violations – OEC can protect you from zoning violations that might not have been flagged before the purchase, ensuring that you’re not held liable for past issues.
- Easements and Rights of Way – It can provide coverage for issues related to easements or rights of way that might restrict your use of the property.
Given the complexity of real estate transactions and the potential for undiscovered issues to arise later, OEC can offer valuable peace of mind and help protect your investment from future legal challenges.
Title Questions?
You really should read your title insurance policy and the additional information they send over.
But, what do you do if you have questions about it?
- Ask the Title Company First – If you have questions about the title or title insurance, your first step should be to ask the title company. They are the ones issuing the policy, and they may be able to explain it in detail. In some cases, they may involve their title attorney to answer technical questions.
- Hire Your Own Attorney If Needed – If you’re not comfortable with the answers you receive from the title company, consider hiring your own attorney for a more in-depth review. Title issues can be complex, and it’s worth getting legal advice to protect your investment.
- Real Estate Agents Aren’t Title Experts – While your real estate agent can help coordinate the process, they typically have very little training in title work. Avoid relying on your agent for advice about title issues, as they may not fully understand the details.