When buying or selling your Colorado Springs home you most likely do the appropriate research before choosing your real estate agent, your lender, your moving company and others. But did you know that you also have the right to choose your title company? In our previous posts we explained the importance of title insurance and how the costs are determined. So, it is critical to choose a reputable, experienced company to ensure that you have a smooth and hassle-free transaction.
Below are 9 questions you should ask when searching for a title company.
Is my Money Safe?
Make sure that the company has a fully staffed escrow and accounting department dedicated to protecting your funds. Ask for a written guarantee that the company does not disclose your personal information to anyone not involved in the transaction and find out if they carry fidelity coverage and errors and omission insurance.
Is the Title Company Financially Stable?
To make sure that the title underwriter is financially stable, check the Demotech website, which issues Financial Stability Ratings (FSRs) for title underwriters.
Is the Title Company a Neutral Third Party?
Some title companies are owned by lenders, real estate firms or builders which may cause a conflict of interest. Your Title Insurance company should be independent and unbiased to ensure that the transaction closes according to the terms of the contract, without any complications.
Is the Rate Quoted Much Lower than What Other Companies are Charging?
Below market premiums may indicate a lack of experience, subpar service or insufficient financial and accounting controls.
In Addition to the Premium, are there Other Fees and Charges?
Ask about fees for electronic delivery, overnight courier, cashier's check, release tracking, wire transfers and other charges that may add up to be more than the amount charged by reputable title companies. Make sure you have all the associated fees in writing before signing any agreement.
Does the Title Company Conduct Thorough Title Searches and Report All Exceptions?
Title companies are required to perform a "reasonable examination" for every transaction, which includes providing you with actual documents for any exceptions (e.g. liens, unpaid taxes). Your title company must identify, disclose and resolve all issues prior to closing.
Is the Title Company Locally Owned and Operated?
Beware of a title company which outsources production of the title commitment and portions of the closing process overseas. A local company will be more knowledgeable about Colorado Springs real estate laws and customs as well as the local real estate market.
Are the Employees of the Title Company Licensed?
In Colorado, title underwriters, agent companies and agents are licensed through the Colorado Division of Insurance. Any title company employee who provides rate information to the public must have a license. By Colorado law, sales people, title examiners and searchers must be licensed. The Division of Insurance also regulates activities and has the right to audit files, impose fines for improper actions, discipline agents and take other corrective action.
Is the Title Company a Member of the American Land Title Association (ALTA)?
The professional/lobbying organization for the title insurance industry is the American Land Title Association (ALTA). In 2007, ALTA launched the "The Title Industry Consumer Initiative" which details the association's strategy for improving industry oversight and educating and protecting consumers. You can learn more about the Consumer Initiative on the ALTA Web site.
Thank you to Sara Martin of Land Title Guarantee Company for providing the above information.