get timely answers and solutions when there’s an issue to be
cleared up before closing the transaction.
Find out if the company you’re considering has a fully staffed
title department at their local headquarters, or at least in your
IS THE COMPANY COMPLIANT WITH
NEW FEDERAL RULES?
The Consumer Financial Protection Bureau has a host of new
regulations that will be effective August 1st, 2015, for any
residential transaction involving a federally insured loan. The
new rules touch on many aspects of title company practices,
from enhanced security measures to new forms and time
frames for processing.
As this deadline approaches, it will be vital for the health of your
transaction that the title company be compliant with all the new
requirements. Most lenders will be vetting title companies for
compliance well in advance of the official deadline, and your
transaction could be stopped in its tracks if the title company you
choose is not prepared.
If you’re hoping to close your transaction any time after June 1st,
2015, it’s a good idea to ask the question: “Is your company
ready to comply with new rules from the CFPB?” You’ll sound
super savvy, and if the person you speak with has no clue what
you’re talking about, it would be best to move on.
WHAT VALUE-ADDED SERVICE DO I GET?
Again, title companies in Texas can’t compete on price, and
those that are serious about standing out from the herd offer a
range of resources and services to smooth and enhance the
experience of buying or selling a home.
Look for things like reports and guides that help sellers answer
questions about their property, and explain the closing process
for the lay-person. Some offer both printed and online resources
that help buyers learn about local schools, taxing authorities, and
communities. Some have online calculators to help in estimating
costs, and mobile applications to connect you with branch
locations and other resources.
ARE THERE ANY RELATIONSHIPS
I SHOULD KNOW ABOUT?
This item is a question for your real estate or mortgage
professional, as they help guide your choice of title company.
Because Realtors and mortgage lenders are involved in more
transactions than the majority of consumers, they tend to
have relationships with particular title companies and escrow
officers. This is a normal and functional aspect of the way
these industries work together.
However, some real estate brokerages, builders or title
companies form business agreements to steer transactions to
a particular provider. If certain legal requirements are met,
this is allowed under existing laws, although some of these
rules are under review by federal regulators.
As a savvy consumer, it’s wise to ask whether a title company
has been recommended based solely on their stellar service
and performance. Any side deal or “affiliated business
agreement” is required to be disclosed by law, and you as
the consumer have the final say in what title services provider
handles the transaction.
EXCEPT… IT’S NEGOTIABLE IN TEXAS
That is to say, buyers and sellers must ultimately come
together and agree on the choice of title company. In Texas,
the agreed upon title company is indicated on the
promulgated sales contract.
There are arguments on both sides of the issue as to whether
sellers or buyers should have their choice. On the one hand,
sellers sometimes need the assistance of a title company to
resolve known issues that would complicate the sale, even
before talking to a potential buyer. And in Texas, typically
the seller pays for the title policy insuring the buyer (although
this is also negotiable). On the other hand, the buyer is
ultimately the insured party, and will have the ongoing
business relationship with the title company.
The important takeaway is that you as the consumer have a
voice and a vote. All title companies are not the same, and
a little research can help you make an informed choice.
“Find out if the company you’re considering has a fully staffed title department
at their local headquarters, or at least in your time zone.”
“The important takeaway
is that you as the consumer have
a voice and a vote.”