Do You Really Need Commercial Title Insurance in North Carolina?

A man signing a piece of paper on a wooden desk.

As with any other investment, purchasing commercial real estate carries a certain number of risks. If you’re a highly experienced investor, you probably already know what to look out for when planning a new commercial property purchase. If you’re a new investor, you might need to do extra research before purchasing a new commercial property. Whether you’re a longtime real estate investor or just getting your feet wet, one surefire way to invest smartly is by ensuring you are properly protected.

Here are some questions you should be asking your real estate agent as you begin planning your next commercial property purchase.

How Would an Issue Arise with My Property’s Title?

A good title will make or break your commercial property. When you purchase a piece of commercial real estate, you’re likely investing a huge sum of money into a worthwhile financial investment. But what if it’s not worthwhile? 

Commercial title insurance will protect you in the event that there’s a problem with your property’s title. Those issues might include negligence, faulty recordings or paperwork, or even fraud.

How Does Title Insurance Work?

Unlike many other types of insurance, where you pay both a premium and a monthly fee, for title insurance you pay one lump sum premium based on the purchase price of your property. This policy protects you in case any issues arise with your title.

Oftentimes, when issues arise with your title, they are often extremely costly—and at times impossible—to resolve. That’s why it’s so important to get title insurance.

Here’s how it works: when you are beginning the transaction to purchase a piece of commercial real estate, you’ll work with your agent to obtain a title insurance policy from a local title insurance company. That company will work with a title agency to perform a title search. They will thoroughly investigate the history of the property’s title to ensure it is clean. If any issues arise with the title, it may signal that this is not a worthwhile investment. You can also work with the seller to resolve these issues before you buy.

How Do Real Estate Titles Differ From Other Types of Property?

A real estate title is much more complex than, say, the title for a car or a boat. The title to a real estate property is not determined by a single piece of paper. Real estate titles depend on an existing chain of different documents related to that title.

Finding out who owns a specific piece of property can be challenging, especially when it’s gone through many different owners. Taking out a title insurance policy includes researching its history, which lets you know if there are any issues you’d rather avoid with a particular property.

What Should I Keep in Mind While Shopping for Title Insurance?

When it comes to title insurance, it pays to do your research. While you certainly don’t need to hire an attorney to purchase title insurance, you should be aware that your agent and the title insurance company are not able to provide you with legal advice as you shop for a title insurance policy.

Typically, there are two kinds of title insurance: an owner’s policy and a lender’s policy. The owner’s policy protects the owner for the entire amount of time they have interest in the property. The lender’s policy protects the lender for the amount of time that the property is being paid off.

When it comes to taking out an owner’s title insurance policy, you should be sure that it includes the following:

  • Extended coverage
  • Taxes
  • Loss determination
  • Survey issues
  • Special/project use
  • Unusual loan documentation issues

For a full list, please contact us at Tryon Title Insurance to discuss your specific title insurance needs.

What Makes a Title Clean?

Generally, a real estate title is considered clean if it is free of fraudulent errors and does not have any existing liens or claims. Additionally, there should not be any confusion over ownership—as this can make purchasing the property very challenging.

Shopping around for commercial title insurance in North Carolina? Contact our team at Tryon Title a call. We have years of experience helping commercial real estate investors in North Carolina and we have everything you need for a successful commercial transaction.

5 Ways Technology is Changing the Real Estate Industry

A person wearing a sweater with one hand on a computer keyboard and the other holding a small cup of coffee.

In 2020, the real estate industry has shifted to accommodate an unprecedented level of new requirements and restrictions. Technology has allowed agents to adapt in new and interesting ways, making the entire transaction process as easy as possible for buyers and sellers across the country. Real estate technology makes it simple to find a home, put in an offer, negotiate price, and handle the transaction process from start to finish.

In recent years, technology has brought five key benefits to the real estate industry—impacting the lives and livelihoods of buyers, sellers, agents, brokers, and everyone else. Here’s how.

Discovering New Homes

New buyers searching for homes in their area have more options than ever before. Want a free and easy way to see every home for sale in your area without signing up for a service or subscribing with your email address? Download an app. Zillow, Trulia, and Redfin are among three of the most popular home-buying apps on the market today.

Benefits to Buyers

What’s even more advantageous for buyers is that they can easily access up-to-date information on any listed property as well as the surrounding area. This includes things like price, square footage, number of bedrooms, purchasing history, and more as well as local information like school district, local attractions, proximity to major roads and expressways, and more.

Benefits to Sellers

When you’re selling a home, you can easily look up home values and see what other properties in your neighborhood are selling for. This is a great way to begin researching the market.

Plus, when it comes time to sell, having your home readily available on a home-buying app increases the amount of potential buyers who will see it.

Virtual Tours

Setting up a virtual or 3D tour for your property has a number of different benefits. It allows a potential buyer to easily tour your property from the convenience of their own home. As such, virtual tours maximize your property’s exposure and enables more and more buyers to easily see it.

It’s also a great way to attract out-of-town buyers, as well as buyers who don’t feel comfortable leaving their home right now due to COVID-19 concerns. By making it as easy as possible to tour your property, you’re increasing the number of prospective buyers who see it.

There are plenty of 3D and virtual tour services out there that can easily take your property and turn it into an interactive digital tour.

Applying for a Mortgage

Buyers can easily become pre-approved for a home mortgage online with just a few clicks of a button. In fact, many banks now allow you to complete the entire mortgage application process online or by phone.

To apply for a mortgage online, you’ll have to provide the lender with the following information:

  • Documentation to verify your current employment
  • W-2’s from the last two years
  • Recent pay stubs
  • Personal and business tax accounts
  • The completed purchase and sales agreement

The Transaction Process

Much of the paperwork associated with buying a home can now be completed online—leading to quicker turnaround times for buyers, sellers, and their respective agents. This also creates greater organization for all involved parties, as important documents are all stored online in one central place.

In addition, many of the payments, scheduling, and appointments that come with buying a home can be coordinated and completed online. Technology is streamlining all aspects of the real estate transaction—resulting in faster and simpler transactions.

It’s also possible to sign your most important documents and contracts online, taking away the need to meet in person to complete your transaction.

Applying for Title Insurance

It’s never been easier to apply for title insurance in North Carolina. Here at Tryon Title, you can easily apply for and purchase title insurance without having to leave the comfort of your home.

Whether you need commercial or residential title insurance, we’re here to help. We partner with the state’s leading title insurance underwriters, guaranteeing you a streamlined and stress-free title insurance process. Click here to get started today.

An Explanation of North Carolina Commercial Title Insurance

A shot of three commercial buildings.

Commercial real estate is a complex investment choice with a lot of different aspects to consider. Unlike residential real estate, it typically comes at a much higher price tag and a confusing negotiation process. As such, it’s important to protect your investment as much as possible—to the full amount of money its worth—with a thorough and effective commercial title insurance policy.

Commercial title insurance in North Carolina is straightforward: it protects the investment for the investor for the full amount of money paid for the property. As a commercial real estate investor, you need commercial title insurance.

Here’s why.

What Does Commercial Title Insurance Do?

Commercial title insurance protects the investor in the event that any issues arise with the property’s title. When you take on an investment, there’s always an inherent level of risk. For real estate, it is always possible that an issue may come up with the property’s title.

The type of issue generally varies, but it may include negligence, a clerical error, or fraud. When this happens, without a title insurance policy protecting them, the property investor may end up losing the property they paid for without any financial reimbursement. In addition, they would be responsible for covering any court or legal fees necessary to address the issue in a court of law.

That’s why commercial title insurance is so important: it protects you financially as you make a huge property investment.

What Kinds of Property Require Title Insurance?

While title insurance is used in all types of real estate transactions, it is especially valuable for commercial real estate as the purchase price is usually much higher and the purchase agreement more complex.

Commercial real estate agreements are extremely nuanced, so it’s important to ensure that your commercial title insurance policy covers you completely in the event that anything happens.

Who Pays for Title Insurance?

In North Carolina there are two types of commercial title insurance: the lender’s policy and the owner’s policy. A lender’s policy protects the lender from financial repercussions in the event that something happens with the title. An owner’s policy does the same, but for the owner or investor of the property.

If the buyer is using a lender, they are responsible for buying both the lender’s policy and the owner’s policy. The lender’s policy will stay in effect for the amount of time that the loan is being paid back. The owner’s policy lasts for as long as the person owns the property or has a financial stake in it.

It’s important to note that the lender’s policy only protects the lender. We highly recommend the buyer also take out an owner’s policy to protect their own financial situation.

What Does the Title Insurance Process Look Like?

Every title insurance policy varies slightly depending on the type of commercial property being purchased, as well as its title history. The first step to obtaining title insurance is contacting a reputable North Carolina title insurance agency. The agency will then conduct a title search to investigate the history of the property and its different owners.

They will closely examine all of the recorded title transfers for the property and look into any liens, encumbrances, and easements taken out against the property. This search is very thorough, and the agency will take every possible measure to ensure the title is clean.

Once the title search is complete, the agency will provide a report with its findings to the buyer as a preliminary report, who then has the chance to review it with the seller and their lender before purchasing the property.

What Does the Preliminary Report Include?

The preliminary report is one of the most important parts of the title insurance process. This report contains all of the findings from the title search, including any liens or other encumbrances that have been taken out against the property. It clearly defines the state of the property’s current title in relation to the seller.

Once the report has been issued, the seller has the opportunity to review it and make any challenges. For example, if the report reveals that the seller does not have a clear title to the property, the seller may then launch their own investigation to uncover any additional details.

Additionally, the buyer must carefully review the report to ensure there are no outstanding issues with the title. This is very important because the title insurance policy will be based on the findings of this report.

How Do You Obtain Title Insurance in North Carolina?

The first step to taking out a title insurance policy is finding a reputable agency with experience helping real estate investors and buyers in North Carolina. Here at Tryon Title, we have over 30 years of combined experience assisting buyers with their real estate transactions.

Due to the nature of commercial real estate, choosing the right agency to help you is of the utmost importance. Our team is committed to offering the best possible experience, respecting attorney and paralegal deadlines by providing fast and accurate service. Give us a call today to get started.