When is a Property Transferred? It May Not Be When You Think!

Title Transfers and Title Insurance: A Comprehensive Guide for Cleveland Realtors

Hey there, Cleveland Realtors! It’s Mike Ferrante, your trusted Cleveland Realtor from Century 21 HomeStar and 21 Mike Team. Today, we’re diving deep into the intricacies of property transfers and title insurance, shedding light on critical aspects that often leave us with burning questions. I’m joined by special guest Beth Anthony from Infinity Title, along with Dave Freeberg, their chief legal counsel, providing valuable insights into the often misunderstood roles of title companies.

Understanding the Role of Title Companies:

Beth Anthony starts our discussion by clarifying the essential roles of title companies. Title companies act as escrow agents, handling transaction documents and funds between parties. Additionally, they function as title agents, conducting title searches and ensuring clear title delivery. Beth emphasizes the inseparable connection between the title search and escrow processes, discouraging the separation of these roles for efficiency and accuracy.

Choosing the Right Title Company:

The conversation shifts to the critical decision of selecting a title company. Beth shares the importance of complying with RESPA laws, allowing buyers or sellers to choose a title company while presenting them with legally mandated options. Tony Geraci adds his perspective, cautioning against blindly accepting the seller’s choice, especially when dealing with investors or builders who may have affiliations that could compromise a thorough title search.

Insights from Legal Counsel – Dave Freeberg:

Dave Freeberg, the legal expert in our discussion, provides clarity on RESPA compliance. He explains that while sellers can dictate the title company when covering the costs, RESPA prohibitions come into play if one party forces the other to pay for title insurance. Dave encourages a buyer-focused approach since title insurance claims usually arise on the buyer’s side.

Unveiling Title Insurance:

Our attention then shifts to title insurance, and Dave Freeberg shares real-world examples of when title insurance becomes crucial. From disputes over driveways to encroachments, Dave emphasizes the importance of having title insurance to protect against unforeseen issues in property ownership. Tony Geraci adds instances of unpaid liens and missing signatures causing problems, further emphasizing the need for comprehensive title coverage.

Title Transfer: Beyond Recording:

Mike Ferrante raises an intriguing question about property ownership post-sale, emphasizing the commonly misunderstood notion that recording the deed is the sole determinant. Dave Freeberg steps in to clarify that title transfers occur upon delivery of the deed, whether recorded or not. He cites case law and highlights that recording primarily serves to inform third parties, not to transfer ownership between buyer and seller.

Deciphering Closing in Contracts:

In anticipation of next week’s discussion on the new purchase agreement, Mike Ferrante teases the changes in specifying who pays for the owner’s title policy and when the property is considered closed. Dave Freeberg navigates through the intricacies, explaining how the closing date is not solely tied to recording. Instead, it aligns with meeting all conditions set by the parties involved.

Conclusion:

In this enlightening conversation, Beth Anthony and Dave Freeberg debunk myths and provide invaluable insights for Cleveland Realtors navigating the complexities of title transfers and insurance. As we eagerly await next week’s deep dive into the new purchase agreement, remember, the key to successful real estate transactions lies in understanding the roles of title companies, making informed choices, and recognizing the nuances of title transfers beyond mere recording.

Stay tuned for more expert guidance from the 21 Mike Team!

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