Title Insurance for Vacant Land?

If you’ve been through a closing process on a home, you know that both you and the bank will have a title insurance policy to protect both of your investments. But let’s say you’re not purchasing a home, just some land to build on or invest in. Do you need a title insurance policy for vacant land?

The simple answer is yes. Title insurance doesn’t just cover a home, because a title search isn’t restricted to only the building on your property. Empty lots and vacant property could be just as vulnerable to fraud or errors on a title. A policy covers any future legal trouble, regardless of the kind of real estate you’re buying.

Unfortunately, many assume that the deed to a piece of land guarantees your ownership forever. A deed merely shows the transfer of the ownership, but doesn’t protect you from other hazards. Unwanted liens and claims can still come out of nowhere, even if you have the deed to the land.

Did you know that over time you can obtain the rights to the air above your land or the utilities that run through it? Some of these may have been purchased by a previous owner, but if they were missed in the public records, they could be overlooked during a title search. 

The last thing you want in your vacant land is any hidden problem, like outstanding taxes, rent, or misfiled documents that you merely inherit from your purchase. You still need an owner’s title insurance policy on your new land. Like purchasing a home, the purchase occurs once at the closing and is in place as long as you or your family owns the property. If your client is interested in purchasing a vacant lot, remind them that they still need a title insurance policy, and that they have a choice when it comes to the company they use!

Title Insurance Will Keep You Flipping

You don’t have to turn on HGTV to know that flipping homes is a booming and lucrative trade. Whether it’s for a rental property or as a next career, house flipping is a great way to both improve an existing property with great bones and see your investment unfold in front of your eyes. Buyers don’t want to be in these homes for years, they want to be in and out in a matter of months. Which begs the question: do short term flips and investments need title insurance?

If you’ve got a shiny new real estate license and a desire to fix and flip, or you’re looking for a side project or income property, it’s important to know all the angles and exactly what you’ll need to protect yourself. Title insurance is a no brainer for a 30-year fixed mortgage. But what about for a 6-9 month investment? Yes, you absolutely need title insurance for ANY property you own for any length of time.

While you may think you know your new fixer upper, it can come with all kinds of hidden challenges, both on and off the property. Legal claims, misfilings and unwanted restrictions could give you just as much headache as mold and structural damage. Lenders, investors and tax agencies that are looking for previous owners might come after you, and that’s nothing to scoff at. Even if you’re looking to shave some corners off your budget, neglecting title insurance could wind up costing you a ton in legal fees and proceedings. The risk of skipping title insurance far outweighs any potential savings.

Another important consideration is to consult a lawyer. If you’re not a real estate agent, make sure to know all of your rights and all the angles before you sit down at the closing. If something goes wrong with your property, the plaintiff won’t work through the real estate agent, they’ll work through a lawyer. Knowing the territory before you buy is critical to having long term success in buying, fixing, and flipping properties. Bottom line: talk to a title insurance agency before diving too deep into the flip game.

The Difference Between a Lender and Owner Policy

More than likely, your clients already understand the need for and value of title insurance when purchasing a home. A common question that arises during closing is, why are there two separate policies for the owner and the lender? Most other insurance, like car insurance, only requires one policy for the person who actually owns the car. So why is title insurance so different?

Unlike other insurances, title insurance is purchased one time instead of collecting regular premiums. For the buyer, having an owner’s policy protects you from fraud, errors, and disputes that may arise, including any legal fees that are associated with these matters. It also covers the full purchase price of the home should you lose equity somehow.

A lender’s policy covers the bank’s interest in your property. It will also cover the purchase price of your home. One difference in the two policies is that the lender’s policy decreases as you pay on your loan. Eventually this policy will disappear as the loan is paid off.

Both policies are important to protect both yours and the bank’s investment. This way, both lender and buyer are safe from any unforeseen heirs, fraudulent claims or processing errors. We at Team Title Services help both property owners and lenders get title insurance. If you are an agent, broker, or lender, we are happy to help you establish your own title company to better assist your clients. If you are in the process of purchasing a home or property and in need of title insurance or other personal insurance, we are here to help your closing go smoothly and protect your investment through personal insurance. Contact our office to see how we can best serve you!

The Cost of Title Insurance

As a realtor, it is essential for your business to fully understand the benefits of title insurance. Simply having them sign a title insurance policy and briefly explaining what title insurance is works for some clients, but others need some reassurance and more in-depth information before closing on their house. If a client asked you to give a real-world example, could you break it down for them? With over 700,000 title claims to date, there are plenty of ways to illustrate and explain the real cost of not having title insurance.

When people are faced with purchasing a home, they often look to cut corners and save money. However, it is vital for them to fully understand that title insurance is not one of the areas to overlook. A client may try and opt out of purchasing title insurance, but it could wind up costing them far more than the title insurance policy costs if a problem should arise. Even if it’s unlikely for a client to face a claim, having a policy in place could literally pay off big time.

There are scenarios that could knock down the value of your client’s home and property that go beyond the paperwork. Think about this: if your client chose to opt out of title insurance, and an easement was discovered for utility work in the back of their property, their value goes down potentially by tens of thousands of dollars when they try to resell. But, if they had fully understood the value of an owner’s policy at closing, they could have recouped their losses in the sale of their property. What could have cost a client thousands of dollars in losses can be prevented for pennies a day. This is a great example to illustrate to your clients how title insurance could benefit them in the long run.

If you understand how to best educate your clients on the real costs associated with title insurance, you will give them more peace of mind and more confidence in you as an agent. Be prepared to talk about things beyond the typical clerical errors, claims, and outstanding debts on the property in order to give them an in-depth understanding of what title insurance protects them from. 

Knowing how to illustrate the true cost of title insurance will make you a more confident agent, too. The ability to clarify all aspects of home ownership will not only serve your clients better, but will get you more business. On title insurance, and any real estate topic, do your homework so you can navigate any topic with expertise. If you need assistance in explaining title insurance to your client, as well as providing them with an efficient closing atmosphere and process, contact Team Title Services.

Real Estate Terms Cheat Sheet

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Real estate terms come naturally for real estate agents, mortgage lenders, and title insurance agencies. Not so much for clients. Serving your clients well means explaining some of the words they’re going to hear a lot throughout the buying and selling process. This will give them confidence in their understanding of what is going on during the process. Sometimes, you need a good cheat sheet of terms that clients often hear during the home buying or selling process, but often don’t fully understand. We’ve compiled a list of 15 terms with a quick, one phrase description to help your clients know the important lingo that can give them the knowledge to best understand the complicated process of real estate purchases or sales. 

Appraisal – the estimated value of a piece of real estate including the home and land it sits on

Buyer’s/Listing Agent – real estate agent that helps buyers find their new home

Closing Disclosure/CD – form that details and itemizes all costs and fees between buyers and sellers

Closing Costs – expenses associated with the sale and purchase of property

Contingencies – conditions written into a contract that must be met in order for the sale to go forward

Due Diligence – the period of time to research and inspect the home prior to final sale

Earnest Money – deposit paid by the buyer for the property after the seller agrees to the offer, usually between 1 and 3 percent of the contract price

Escrow – unbiased third party that holds all funds, documents, and instructions related to the purchase of the home

Equity – market value for the home minus remaining mortgage balance

Principal – amount of money owed to the lender

REO – real estate owned properties or foreclosed properties owned by a lender

Seller Concession – incentives offered by a seller, such as closing cost assistance, home warranties and other repairs

Short Sale – selling a home for less than the balance left on the mortgage

Title Search – examines public records to check for mistakes and errors in filing

Underwriting – the process by which lenders check buyers’ credit scores and ability to repay loans being issued

We hope that this cheat sheet of terms will help you and your clients to better understand the process of buying and selling property and houses. Please reach out to our team if we can help you through the process of purchasing or listing property. 

Make Closing On a Home Stress Free!

What’s one thing you can do to make closing stress free on you, AND turn your client into a repeat customer?

Make your closing as smooth and stress free as possible.

Even if you’ve got the best closing attorney, the greatest mortgage company, and had the easiest buyers of all time, here are three ways you can make your closing as smooth as possible.

1.    Plan Extra Time

Traffic. Misspelled names. Bad pens. Missing documents. You name it, it might go wrong, and cost you more time than you originally told your clients. They’ve already waited up to 45 days to get to this point, and an hour delay in the closing process can damage your repeat business. Help them (and yourself!) out and create a wide timeframe for your clients to expect to operate in. Tell them way in advance if they’ll have to plan a half day off work. If it goes short, they’ll thank you for it!

2.    Walk Your Client Through the Steps of Closing 

A first-time home buyer will need a crash course in what to expect at the closing. What types of documents are they looking at? What do those numbers mean? Are they supposed to bring ID with them? Even a veteran buyer needs a refresher course. Call them at least two days prior and give them the play-by-play of how the closing will go down. That way, when you get to the table, you can help them go in with confidence. But your job’s not done when you get there either. Pay attention to the looks on their faces when a new document is put in front of them, and be ready to speak up and say, “Remember this one says…” They don’t just depend on you to find them a home; they need you to walk across the finish line with them as well.  

3.    Develop a Solid Relationship with a Title Loan Company

You’ve got your go-to lenders on speed dial. The buyer might even have theirs ready to go before you can suggest one. You’ve got trust built in for the mortgage already. But what about a title loan company? Having a relationship with a title company can give your clients the extra peace of mind that the home they’ve dreamed about will be protected from all sides. They’re also not going to give this any thought beforehand. The more of your business relationships you can offer them throughout the process, the more appreciative they’ll be of how thorough you are, and the more likely they’ll be to refer you to others.

 

Four Reasons Realtors Should Invest in Continuing Education

After completing you begin your job or finish a degree or certification, you can’t stop learning. The most successful leaders in the world understand that lifelong learning is a critical component to success. Every industry knows that if you don’t keep growing and learning, you’re doomed to be stuck exactly where you are now, or hopping from career to career without advancement or true fulfillment. Becoming a life-long learner is a skill developed at an early age or stage in your career, and refined as time goes on.

Apart from the practical side of continuing education, there are so many great benefits. As a realtor, your clients may never understand the amount of time you invest in your career, but they will immediately notice if you’ve put in the effort to become the best, or if you’re ok to do the bare minimum. Knowing your stuff might get you a lead, but pushing yourself to be better will make your services invaluable to your clients. Here are just a few reasons why continuing education is so important.

  1. You have to do it to keep your license

You worked hard to get your license. Lots of hours, tests, and effort to be able to do what you love could be cancelled out if you fail to keep up with continuing education. Like many other industries, continuing education is a requirement to keep doing what you’re doing. Every state has different standards, and Tennessee requires that you submit a minimum of 18 continuing education hours every two years to maintain your license. The last thing you want is to start over and retest. Continuing education makes your life a whole lot easier and keeps you serving your clients.

  1. You’ll stay up to date with a changing industry

Regulations constantly change, and our industry never stays the same. Thanks to the internet, you might be able to get glimpses and snippets of these moves, but until you fully immerse yourself in a room with an expert, much of it can be lost. Plus, sticking to “the way things were” could be detrimental to your bottom line. If you want to be on your game, you have to know what’s going on. There’s no better way than learning from the best in the business. Continuing education will keep you current on all that’s moving in the real estate industry.

  1. You will serve your clients better (if you apply yourself correctly)

We know that the last thing you want to do is take hours away from your clients and sit through a boring informational session to simply check off the requirements. But if you’re really committed to serving your clients as best you can, you can take your new knowledge and increase your level of service. We’ve heard countless times that continuing education is what you make of it. If you put in minimal effort, you’ll get minimal value. Clients will trust a realtor’s judgement when they know you know your stuff, and your clients will be better off throughout the entire process of buying or selling. So do THEM a favor by soaking up all you can, and applying it directly to the care you provide.

  1. You’ll earn more money!

According to the NAR member profile, realtors who have an NAR continuing education certification earn on average $27,000 more per year. Do the math: that’s an average annual payoff of $1,500 per continuing education hour you complete. You’re not just doing this for your client’s interest; it’s also really good for your own business. On all accounts, continuing education is worth every penny and will do nothing but make you a better realtor.

Why You Still Need A Realtor in 2019

In the world of eBay, Amazon, and YouTube, anyone can become a DIY pro and an expert in a lot of things. More and more people are perfecting the art of a side hustle and entrepreneurship continues to be on the rise. Unfortunately, that means that many people think they can ignore the realtors of the world and do things themselves. You know your own value, but communicating that to clients and marketing yourself are more critical now than ever before. Here are three easy and concise reasons that you can lay in front of clients during that first meeting to reassure them of why they need your services.

  1. A good realtor will provide you with much needed counsel.

Imagine giving your clients a therapist, mentor, and market analyst all rolled up into one nice package. While they may not see it that way, you know the amount of advice, discussion, and information that you’ll be giving your clients throughout the buying or selling process. Unless they’re hiding a real estate license somewhere, they won’t have anywhere near the knowledge and experience you do. Remind your clients that your services go far beyond overseeing a transaction, and that you care about their family and making the right choice. Make sure to include past client testimonials on your website or marketing materials so that new clients know how far your services will go for them.

  1. Contracts can be tricky

As a real estate agent, you are bound by law to have a fiduciary relationship to your clients. But beyond that, they need to know more than your legal obligation and your competency. They want to know you have their best interests at heart, and showing them that you value more than the commission will go a long way. Walking them through every document and explaining all of the information clearly is one of the best ways to do that. Pay attention to their confused looks and be ready to clarify any concern or question they have.

  1. Clients will make more or spend less with a realtor at their side

Even if a home is fully owned, the temptation to skip using a realtor is greater now than ever before. The desire to maximize profits while skipping the commission pieces is a draw for anyone in today’s market. But there are so many things that these potential clients won’t think through. Information about the area, staging, showings, and paperwork can quickly derail those good intentions and cost them more time and money, or even incur a lawsuit. With a realtor, statistics show that clients will make more on a sale or spend less on a purchase. The value is truly there for your client. Reassure both new and existing clients that having you at their side is the very best thing for them throughout the entire buying or selling process.

Two Reasons You Should Be Cautious with School District Maps, and Two Reasons You Shouldn’t

A family looking to make a move is one of the most exciting and challenging client experiences. Kids are trying to pick out rooms during showings, while parents kitchen sizes and living areas on their mind. No doubt realtors already know that one of the first things parents know about a potential house is the schools their family will be zoned for.

While it’s not the only consideration for a client choosing or not choosing a home, it’s an important one for young families looking to settle down in a place long term. Seasoned realtors know the basics on where the good schools are, but taking the time to ensure your clients are empowered with information is tougher than just “what you’ve heard.” A lot of clients don’t know all of the ins and outs of choosing both a house and a school district. As you guide a family through this important territory, here are two reasons you should be cautious when discussing schools, and two reasons you shouldn’t let the rankings completely dictate what you show to a family.

They can change frequently. Almost every election cycle brings some kind of rezoning or redistricting along with it. Websites that clients check aren’t always accurate, and hearsay is even less reliable. We’ve seen directly that clients have purchased a home because of the proximity to a great school, only to find out that the district was redrawn and that they’re actually a large distance away from where their child was supposed to attend. Trust us, that makes for an awkward conversation! Make sure you give your clients the most accurate information about the district they could potentially call home.

Especially if your clients are new to the Chattanooga area, YOU are their trusted resource. You are the gatekeeper of impartial information. Local family members or colleagues, if the client has any of these, are certainly important, but clients typically look at these opinions as biased. You have the opportunity to provide unbiased, fact-based opinions. A client might ask for your opinion, and you certainly should be helpful, but make sure all of your statistics and data are solid. Make sure you know how to navigate the Hamilton County Schools website and keep up to date with what schools are doing. It’s also helpful private school information ready so clients can consider all of their options.

HOWEVER…

School districts aren’t the top item for everyone. You may have a family that chooses to homeschool their kids or have already chosen private school. Or, a client might already love the community they live in and the schools they would potentially be zoned for, no matter what. In that case, your comment or opinion might be considered insulting. Getting to know your clients from the first meeting is critical so you know how to best serve them as their realtor. That way, you can prioritize their needs and get them in the perfect home in the area they desire.

Chattanooga has great magnet, charter, and private school options. When a client gets stuck on a house in a district they’re not crazy about, it’s important to reassure them of all the options they have. Especially if they’re new to the area, they might have limited information about schools outside of a quick internet search. Chattanooga magnet schools like Center for the Creative Arts, Normal Park Museum Magnet School, Chattanooga School for the Arts and Sciences, and many more are some of the top performing schools in the area, and our private schools have a long history of excellence as well. Be prepared to give a family all of their options, so that choosing a home doesn’t limit their school choices.

The more you know about our area, the better you can serve families looking to settle down in our great city!

Do I Need to Renew My Title Insurance?

As a realtor, you will have clients reach out to you after the sale or purchase of a home for a variety of reasons. Sometimes it’s to get a copy of important paperwork for tax purposes, or (hopefully) to refer you to their friend who wants to sell their home. One question you can avoid getting later has an incredibly easy explanation: “Do I need to renew my title insurance?

This is a great question a client will have at some point. After all, every other kind of insurance has a renewal or continuing premiums. All insurance protects against risk, and most insurances protect against future risk. As those risks increase or decrease, the needs and premiums of the insurance increases or decreases along with it. Car insurance is the most common example of this type of premium fluctuation.

However, title insurance is different. Title insurance protects against past risk of the property compared to future risk. A title insurance agency will make sure there are no errors in the records, deeds, and financials of your property. If someone tries to collect a debt on the property you didn’t agree to, the insurance policy will cover you. They will even take care of your legal fees if someone disputes your ownership of your property. The policy doesn’t cover the equity you may have in your home, but it does cover the value of your home and property so you don’t take a loss.

Unlike other insurance policies, title insurance is paid once at the closing, and the policy is effective as long as ownership remains in the name of the insured person or their heirs. Information about title insurance will be given to you in the closing documents. Knowing the differences between title insurance and other insurances going into the closing can reassure your clients and give them the peace of mind to know that their investment will be protected. It’s an easy conversation that will give you more credibility and build trust throughout the buying process.