How much of a difference can the title company make when it comes to protecting your assets in a real estate transaction?
In Part 1 of this series we revealed an outrageous new form of real estate fraud happening in America. In Part 2 we posted 9 Tips for Staying Safe From Real Estate Fraud. Now let’s look at how to avoid major substantial loss by choosing the right title insurance company for your transaction…
As a real estate buyer and seller, the title company facilitating your transaction can make all the difference in how safe you are financially. This can show up in many ways. However, one of the best tells of how safe you are is the title company’s approach to security. Are they aware of the need? Do they have checks and systems in place to keep clients safe? Do they simply write down credit card information on scraps of paper, or do they double check all information before sending a wire transfer?
Title Companies aren’t perfect either
The American Bar lists many types of schemes, many of which some may not have thought were real estate fraud before. Yet there are some very glaring ones happening today such as criminals trying to intercept funds, or stealing the deeds to homes. But title companies and title agents sadly haven’t always completely been clean either. Expert witness Don Coker alludes to the fact some companies may try to avoid paying out. Others have engaged in helping organize mortgage fraud or have redirected funds instead of paying off mortgages. When shopping for the best company ask about their reputation. Are they known for doing things right?
Quality Work & Sustainability
Sometimes the biggest losses don’t just come from deliberate fraud. They can stem from mistakes and poor business practices. Firstly ask whether they are financial sound enough to be around when you may need their help to sell, refinance your home, or need to make a title insurance claim later.
Some companies just haven’t invested in good staff or systems. They’ve failed to pay property taxes for clients on time, or they’ve filed incorrect papers in public records. That can throw an unsuspecting owner into foreclosure, or result in massive and unexpected income tax bills from the IRS.
The bottom line is that your title company remains incredibly important. Make sure you are choosing a sound, proactive, ethical company to work with.