Today, Wanda Pistella from Leech Tishman Legal Services is here to answer questions that both current and would-be homebuyers may have concerning the title process.
1. What is title insurance, and why is it so important?
In Wanda’s view, title insurance is one of the most important items that you can buy at the time of a home purchase. Title insurance covers the owner, ensuring that they have complete and conclusive title to the property. This form of insurance makes sure that taxes are paid up to date, and also that there aren’t any unpaid liens, assessments, or similar items of that nature.
Even more importantly, Title insurance clears the title so that once the buyer purchases the home and obtains the owner’s policy, they are guaranteed to be recognized as the true owner of the home. There are a few instances in which true ownership of the home might come into question:
- For example, there could be a probate that was done incorrectly—this is an issue that needs to be corrected; you don’t want a long-lost heir to the property to come out of nowhere and claim a right to the property.
- There might also be problems with a wild deed, which is when a deed is on the property but doesn’t fit with the property. In that situation, she’ll have to make a determination and clear the cloud on title.
- A homeowner could also potentially run into issues with homemade deeds, where a person (innocently enough) prepares a quitclaim deed. This becomes a problem in the instance where they’re trying to add a family member onto the property, but they’ve accidentally conveyed the property over to that family member.
From the above examples, you can see how disruptive issues of title could be to a real estate transaction.
2. How much does title insurance cost?
On average, a title insurance policy comes at a promulgated rate that is dictated by the Florida Insurance Commissioner. That means it’s a fixed amount that is based on the purchase price of the home. Title insurance consists of a one-time payment, and the general rule of thumb is to expect to pay around or between $550 and $575 per each $100,000 of the purchase price. For example, if you’re buying a $200,000 home, the title insurance policy would amount to around $1,100 as a one-time payment.
3. What will buyers need to bring to the closing table? According to Wanda, the buyer needs to bring in two things:
- First, you’ll need proof of identification such as a passport, driver’s license, or state ID; this will prove that you are, in fact, the buyer of the home.
- Second, you’ll need cash to close prior to being able to officially close on the home. Wanda makes sure that the cash is in the form of a wire transfer, since it needs to be clear funds on the day of closing.
- Your lender may require you to bring additional documents to the closing table, so be sure to speak with them directly about what you’ll need.
4. What does the wiring process look like?
This is extremely important to understand, given the prevalence and dangers of wire fraud. At Wanda’s office, they have a specific procedure for wire transfers. Her office is responsible for sending out the wire instructions—not the real estate agents or members of either party in the transaction. These wire instructions are sent via encrypted email, which will detail how to proceed with the transfer in a way that allows you to be confident that you’re sending your money to the appropriate place.
Wanda always verifies these transfers by phone, and encourages buyers to do the same. Don’t answer any inquiries the wiring instructions if they come from someone outside your title company, as that could very well be a scammer trying to trick you into sending your money to them instead of your title company.
5. What is the significance of mentioning “House Match” when you close with Wanda’s company?
If you mention “House Match” at the time of the contract, they’ll provide you with a discounted closing fee. The goal is to have proper procedures from contract to close, so from the start, they’re communicative with you and with House Match to ensure that the deal is smooth and successful in the end and that all parties are happy.
I’m grateful for Wanda coming out to answer these key questions about the nature and importance of title insurance. If you have any questions for us, feel free to reach out. We would be glad to help you.