Welcome to the series of posts helping introverts with buying a home, selling a home or investing in real estate. I tend to be an introvert more than an extrovert so I thought it would be appropriate to give some advice on how introverts can succeed in real estate. My last post was on Three Guidelines for Introverts to Use When Making an Offer on a House. For all the posts, go here.
By now, you should have a house under contract and ready to start working with a title company. What exactly is a title company? In the purest sense, the title company will review property titles and issue insurance policies protecting the owner and lender against title claims. Basically, it gives the buyer assurances against false claims against their rightful ownership of real estate. Title companies do so much more as well. They will work with buyers and sellers, both real estate agents, lenders and governmental agencies to ensure a clear transition of the real estate sale.
Escrow officers play an integral role in the home buying process. The resourceful individuals will reach out to you at the beginning of the process with a title commitment, which is their promise to issue you a title insurance policy. The commitment will also outline any claims on the title that must be removed before they can issue said insurance. This step is enlightening because it shows you if you can anticipate any issues with sellers that must be cleared before you can buy the house. For example, many divorced couples will have to sign forms of release even after they are no longer living together. After option period is over, the escrow officer will work with you and your lender to make sure to get the paperwork needed for you to get the mortgage. Finally, on the day of closing, you will meet with the escrow officer, or someone representing her, to sign the required documents for the ownership transfer to occur.
Title companies come in all shapes and sizes so be sure to know your preferred title company before making offers on properties. Many times, the seller will have a preferred title company and in this high competitive market, it is always best to go along with their choice. You, however, can do some research on the title company to make sure it is a reputable one so there will not be any funny business later. If you feel uncomfortable with the seller’s choice of title, you should discuss it with your real estate agent to determine the proper course of action.
There are some ways to make it easier for you to work with a title company as an introvert. Please find three below (with some bonus advice).
1. Wire your earnest money – When you are in a contract for a house, one of the items you put in the offer is an earnest payment to the seller. These earnest funds are a good faith gesture on your part that you are serious about following through with buying the home. Most buyers will put down 1% of sales price towards the earnest funds. These funds are refunded to you as the buyer if you terminate the contract without default. You can terminate without defaulting during the option period. You can also get out of the contract for a property not being approved by the lender due the sales price being too high or the property condition being too bad. You should remember to ask your real estate agent during each step of the process if you can terminate the contract without defaulting on it. Earnest funds are due to the title office by the third day after the contract expiration date. The title company will place the earnest funds in an escrow account that will either be paid towards the sales price of the house, or go to one of the two parties in case the contract is terminated. Many buyers will forego the delivery of a check to title in favor of wiring the earnest funds to the title company. All title companies allow this option, which is great for introverts. Be forewarned, however, there are scams out there where you receive an email asking you to wire funds to the title company. You should never wire funds without first verifying with your agent or title company that it is a legit email.
Bonus: You might also consider using Paypal to deliver option funds. Option checks do have to be receipted by the listing agent or someone who works with the listing agent. With this mind, be sure the listing agent is willing to receipt the paypal payment as a cash payment on the receipt page of the contract.
2. Whatever title asks, do – Title companies close hundreds, if not thousands, of properties every year. For the most part, they know what they are doing. When working with a title company, it is in your best interest to act upon requests from them quickly. Luckily, you can do most of this via email and the phone. With the exception of wiring funds, the title company will most likely request items via email. For example, one of the first items the title company will request is the Buyer’s information sheet, which is a simple one page form detailing your contact information. You should fill this out as soon as you can and get it back to the title company. When working with a title company, you will also be asked for items related to the contract itself. If you delay in responding to these requests, it could delay the closing date, which is never a good thing. Homeowners warranties is a good example. Most buyers will have a home warranty package purchased for them by the seller. It is your choice on which vendor to use for the home warranty. When title asks your preference, please be sure to reply in a timely manner so they can get it purchased for you. You should also not ignore any closing documents they send you, usually within a week of the closing date.
Bonus: Once again, title Insurance is still a must for all buyers. This insurance protects you from claims against the property ownership. You will receive a title commitment outlining the basics of the policy. Please don’t ignore this document and ask any questions about it to the title company.
3. Remote closings – When you close on a property, you sign a ton of paperwork so Title companies like you to come to their office to do the signing. In this way, they have ready access to anything they might need during the signing. However, many people do not like going to the title office because the location can be inconvenient or the title company is only open during business hours, making it hard to get there since you work during those hours. Title companies have learned that it is always best to have alternatives for closing so they allow people to close remotely. You can either do this through a paid notary, or the title company will send you the paperwork for you to find a notary. How the remote closing happens depends heavily on the lender requirements so be sure to ask what is allowable. You should also ask about what hours you can sign the paperwork.
Bonus: Be sure to select a place with less distractions if you do pick a mobile notary to meet you. If you pick a busy restaurant to do the closing, it can be distracting for the notary so there is a good chance something might be missed. It is always best to hold it at home, or meet them someone quiet like a public library.