What is the function of a Title Insurance Company?
Legal statutes provide that buying and selling of real estate must involve an
independent third party to facilitate the performance of escrow, closing and
settlement, and the issue of title policies. A full service title company
performs the search on the property, conducts the requisite due diligence to
review the Chain Of Title, identify any inconsistencies, liens, judgments,
etc., issue the Commitment To Insure, manage the funding through escrow
accounting, coordinate all activities between the buyer, seller, realtors,
mortgage brokers, lenders etc., conduct the closing, disburse funds, issue the
Title Insurance Policy to both the buyer and lender, and finally get all
required documents recorded to establish your ownership.
What is meant by “Title”?
“Title” equates to legal ownership of property. It legitimates your
right to “peaceful enjoyment” of the property you own, within
restrictions or limitations of use imposed by government authorities. A
“Clear Title” means ownership is without blemish. A “Cloud on
Title” indicates that some inconsistency exists which may blemish
ownership if not corrected. A “Defect in Title” is indicative of an
encumbrance or a more severe problem needing remedy. Finally, a “Failure of
Title” demonstrates failure to convey ownership from one owner to the
next.
What is Title Insurance?
Title insurance is an insurance policy issued by an Insurance Underwriter,
guaranteeing a buyer’s ownership and peaceful enjoyment against claims, liens
or judgments associated with a property after the purchase is completed. Such
insurance protects against losses arising from events occurring prior to the
date of the policy. Unlike Real Property or Casualty Insurance where coverage
starts on the day a policy is issued, title insurance being Indemnity Insurance
causes coverage to stop on the day the policy is issued. Its coverage extends
backward in time and guarantees that events prior to your ownership do not
result in losses to you.
What is FIRPTA?
FIRPTA stands for Foreign Investors in Real Property Taxation Act of 1980,
which is part of the Internal Revenue Tax Code. The Act was enacted with the
intent of recovering at least a portion of the taxes (based on the Sale Price
and not the proceeds to the seller) due on the sale of real property by a
foreign seller. A foreign seller may be a Non-Resident Alien individual,
corporation, partnership, trust or estate.
The code requires that on all transactions over $300,000 the buyer withhold 10%
of the purchase price from the seller at closing, and remit the withheld amount
to the IRS along with Forms 8288, 8288A & 8288B completed and signed by the
buyer, within 20 days of the closing. All parties to the transaction must have
a TIN (Taxpayer Identification Number), which may be a Social Security Number
or an ITIN (Individual Taxpayer Identification Number) assigned by the IRS via
a W-7 application form. Buyers and sellers are advised to check and confirm
necessary actions for complying with this code and also for exceptions
applicable under certain conditions.
How does the short sale work / What is your process?
Once you submit a title order to us we take on the transaction from the
beginning, before there is a contract, and we will gather the seller’s
financial documentation in order to fulfill the requirements of the lender.
Meanwhile, we’ll prepare a letter to the lender that states the property is
listed as a short sale, provide the seller’s borrower authorization and make
them aware that we are the closing agent. Once there is a contract, we will
then prepare a package for the lender and, continue communicating with the
lender and all other lien holders on a regular basis until we have obtained the
short sale approval and various payoffs. During the lender review period, we
will update the title search and repeat this once a month as needed. Once we
have an approval from the lender, we will prepare for closing on the property.
What is your fee?
We only charge our normal Title Services & Closing Fee, as on any real estate closing transaction (short sale or not), plus the promulgated Title Insurance Premium.
There are no negotiation or other junk fees, nor are there any fees to the agents or “side fees to the buyer/seller”.
On short sale transactions our fees are ultimately paid for by the seller’s payoff lender, just like the REALTOR’s commissions, so there is no ‘out of pocket’ expense to the Seller or anyone else.
What kind of communication is provided during the short sale process?
We pride ourselves on our communication; it is one of our greatest strengths. We are very proactive and once there is a contract in place, we will provide a minimum of weekly updates to all parties to the contract including buyer and buyer’s real estate agent. If the file is lagging, or accelerated, or there are some other issues, we will communicate with the lender more frequently. Every communication we have with the lender will be passed along so that everyone is kept in the loop in real time. And, we use a transaction tracker that automatically emails the updates right into your Inbox!
Do you work with Investors / perform A to B B to C type closings?
No, we do not accept orders in which the buyer is an investor who
anticipates re-selling the property in less than 90 days.
Where are you located?
Our headquarters are in Sarasota; however, we are licensed to issue title insurance for properties all over the State of Florida.
Where do you close? How can you close elsewhere if you are located in Sarasota?
We use mobile closers, a network of people who are specialized in closing a transaction at the client’s selected location. Each closer holds a Notary Public Commission for compliance with closing and notarization regulations, and covered by Errors & Omissions Insurance.