The Florida housing market is rising with more new listings and higher median prices than a year ago. This growth in the real estate market presents an opportunity for more people to move within and into the sunshine state. However, it also presents a risk. Buyers need to protect their real estate investment by taking the necessary precautions and due diligence. Speaking with a real estate attorney can help, but there is more to it.
Learn about title services and how they can protect you when buying real estate.
What Are Title Services?
You pay title services fees as a part of your closing costs when you get a mortgage as a part of a real estate purchase. These fees are from the services associated with issuing the title insurance policy. Lenders require title insurance to protect against someone suing for ownership of the property at some point in the future.
Title Search
The first thing a title company will do is a title search. This process involves examining the title for any conflicts of interest with the title. Anyone that can claim an ownership right to the property presents a risk to your ownership.
Outstanding Mortgages and Liens
The property’s current owner likely has an outstanding mortgage unless they have paid it off and own the property free and clear. A lien could be present if the owner had a contractor perform work. These people will need to be paid off for them to release their claim on the property.
Unpaid HOA Dues
HOAs are common in Florida, and they can present a risk of ownership if the current owner doesn’t pay their fees and dues. Many associations are given broad power to recoup these unpaid monies by pursuing a claim of ownership on the property.
Judgments or Unpaid Taxes
If the current owner has unfulfilled responsibilities, they can be taken to court, where a judgment gets placed on their property. Similar to a lien or mortgage, they will need to be satisfied for you to own the property free and clear.
Easements
An easement is an agreement between the property owner and someone else to allow the other party to use a portion of the property. These agreements can be officially documented or created through un-objected use. While the easement user may not have an ownership claim, they can prevent you from using your property in a manner that hinders their easement rights.
Lease
While someone leasing the property may not have an ownership right, they do have a use claim. If you purchase a property with a lease in effect, you may have to honor the lease for its full term.
Prepare Abstract Of Title And Title Opinion
Once the title company has done its full research, it will prepare an abstract of the findings and an opinion on the research results. The abstract will give you a clear picture of the property’s history. The opinion states the title company’s comfort level with the owner having a free and clear title and your ability to move forward with the purchase.
How to Shop For Title Services
When you work with a lender, they are required to provide you with a list of companies you can provide title services. This doesn’t always mean you have to choose from the list. Some lenders will agree to work with a title company of your choosing. You can also speak with some real estate attorneys that provide title research services. When comparing companies, ask for a quote for their services and what is included in that price. Some title companies only provide the service of a title search. Other companies are more comprehensive and can provide escrow accounts or serve as the closing agent. Read references from other customers who have previously used the title company.
Speak With a Real Estate Attorney
If you are interested in buying a new home or a piece of property, then you will want to work with a title company to receive their title services. This protects your investment from potential claims of ownership. Speaking with an experienced real estate attorney can help you understand what your title company should look for and the course of action if there is a claim of ownership conflict.
Request a consultation today and speak with our experienced attorneys about your future real estate purchase.
