When Title Puts You to the Test
Common Complex Title Issues and How to Solve Them
While the title industry has been protecting the American dream of home ownership for decades, it’s no secret that operating a title company is a complex business. Real estate property is the nation’s largest asset, and title companies have long worked behind the scenes to ensure the quick and secure transfer of land — often uncovering and helping to solve potential problems before the transfer can proceed.
According to the American Land Title Association (ALTA), during the title search, title companies find and fix problems with the title in 25 percent of transactions – usually unbeknownst to the consumer or lender. Some of these problems tend to be more complex than others, and it’s essential for title companies to understand how to properly navigate even the most difficult terrain.
What are Some of the Most Common Complex Title Issues?
When managing real estate transactions, title professionals must be prepared to encounter complicated issues in order to protect homeowners and mortgage lenders against financial loss from problems with property ownership. Among the most complex title issues are tax title sales and property sales from a deceased owner. Let’s further investigate these issues.
A tax sale occurs when the seller loses their property due to unpaid property taxes. The real estate is then sold at auction along with any unpaid taxes (tax deed sale). Completing the required research needed to issue title insurance for a customer’s tax sale is no easy feat.
Typically, the notification process that is done by the County Treasurers office needs to be thoroughly reviewed. Depending on what is found a quiet title action may be required to be filed through the court system to ensure the title to the property is clear. A quiet title action refers to litigation to establish a party’s title ownership of real estate to “quiet” all legal challenges to the related property ownership.
As if that weren’t complicated enough, property sales from deceased owners can also prove challenging to title companies. In the event of the death of one or more of the people shown as a current owner(s) of the property, in addition to recording the appropriate Death Cerfificate(s), it must be determined who then has authority to deed the property and what documentation is required to prove that.
If, for example, the deceased party owned the property individually and there were no other co-owners, it may be necessary to probate the estate, which can be a time-consuming process. When probate is required, a certified copy of the Letters of Authority must be reviewed and may need to be recorded at the Register of Deeds office. This is a document issued by the probate court disclosing who has the authority to sign on behalf of the deceased and what, if any, restrictions to the sale may be involved.
It’s important to note that the estate documents don’t transfer title in connection with the sale, but rather clarify and set up who has the authority to transfer property on behalf of the deceased.
Why Is It Important to Properly Clear These Issues?
Naturally, you can’t close on a property without the title being clear; however, knowing how to properly handle complex title issues can also get you and your client to the closing table faster. Plus, your ability to expertly facilitate these title issues can do wonders for your company’s reputation — which, in turn, can help grow your business.
On the other hand, stumbling over complicated title situations can leave your customers seeking assistance elsewhere. Even with careful oversight and preparation, even the most minor mistakes can derail the closing process and cause headaches for all parties involved in the transaction. That’s why you can’t afford to make costly title errors, no matter what challenges are present.
Proliant Helps Your Title Company Succeed
For independent title company owners faced with myriad scenarios that can impact their customers’ closings, knowing the right way to respond in each situation can be a daunting and overwhelming task. The good news is that help is available for those seeking a unique franchise opportunity to own their own title company, complete with all the financial operational advantages and support systems that eliminate the most difficult barriers to entry.
Proliant Settlement Systems offers its franchisees a fully compliant system and the back-office support needed to run a successful, full-service title company. With Proliant, you’ll have access to ongoing training and an entire team of title professionals that will assist you through the ins and outs of the settlement process. For example, when faced with a title issue, your Proliant team will help you with:
- How to talk to your customer about the title issue
- What to ask your customer for in order to clear the issue
- How to guide your customer in requesting information from the seller in a prompt manner to clear the title
What’s more, Proliant offers continued support to our franchisees, including a customer service team and quality control division that provides additional support via email and phone — so you’re never left without the help and resources you need, when you need them. Plus, Proliant is a trusted resource for our franchisees when they need to send us documents that need prompt attention or a thorough review.
The complexity of issues that may arise in the title insurance industry can hinder the growth of your company. Fortunately, you don’t have to navigate the often-muddy waters of the title business alone. With Proliant at your side, you’ll have the tools and expertise to provide the best customer experience possible.