Do You Really Need Commercial Title Insurance in North Carolina?

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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.

3 Things Every Realtor Should Know About North Carolina Title Insurance

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Buying a property—whether it’s commercial or residential—is a huge financial undertaking. That’s why it’s so important for property owners to protect their real estate investment with a title insurance policy. North Carolina title insurance is a crucial step in protecting your investment for the long term.

If you work with clients as a real estate agent, you should keep yourself up to date on the latest trends and laws regarding North Carolina title insurance. We’re a longstanding North Carolina title insurance agency and we want to partner with you to ensure your clients have the best experience possible.

So, here are three things every real estate agent needs to know about North Carolina title insurance.

It Protects Your Clients

Put simply, a title insurance policy protects the property owner’s rights to own that property.

Whenever you purchase a property, that property’s title will need to be transferred over to you. If something is wrong with the title that could harm the new owner financially, their title insurance policy is there to ensure they don’t lose their financial investment.

Unfortunately, a lot of things can go wrong when a property title is transferred. For example, if a previous owner of the property had a huge debt with their roofing contractor, that contractor may have put a lien on the property. Even if the original owner no longer lived there, without title insurance the new owner would be responsible for paying it.

With title insurance, however, the new owner won’t be held financially responsible for the previous owners’ lien.

It Provides Long-Term Peace of Mind

When it comes to property title issues, something can come up at any time—even years after you purchase the property!

That’s why title insurance is so valuable. It protects your investment for the entire amount of time that you own the home. Best of all, this protection comes at a relatively low cost—just 0.5% of the property’s purchase price.

Its Regulations and Policies Differ by State

Every state has different policies regarding title insurance. That’s why we highly recommend finding a title insurance agency with experience assisting real estate agents in North Carolina.

North Carolina title insurance has its own unique regulations and requirements. For more information, consider checking out the North Carolina Consumer’s Guide to Title Insurance or giving us a call here at Tryon Title.

Connect with a North Carolina Title Insurance Agency Today

Ready to dive into the world of title insurance. Our underwriters and title insurance professionals are here to help.

Reach out to our team at Tryon Title for a new policy, additional resources, and guidance on all things title insurance. We have years of experience helping real estate agents and property owners in all of North Carolina’s 100 counties.

Your North Carolina Real Estate Closing Checklist

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Finally, after weeks and weeks of hard work, it’s time for the best part of the real estate transaction: closing day! Without proper planning, it’s easy for closing day to go awry in the world of real estate—especially when it comes to the home’s title. That’s why we’ve come up with this North Carolina real estate closing checklist.

It includes everything you should do as a real estate agent to ensure a stress-free and successful closing day. Have specific questions about working with a title insurance agency prior to closing day? Don’t hesitate to give us a call.

In the meantime, let’s get to it!

Step 1: Verify that the Sales Contract is Correct

This sounds simple enough, but when done incorrectly it can yield potentially catastrophic results! You’ll want to ensure that the sales contract is correct, and that includes:

  • Making sure the person selling the property is the “record title holder”
  • Double checking that all property is represented in the contract

Oftentimes, commercial properties may actually include more than one piece of land so be sure that both the seller and buyer are on the same page and everything is properly accounted for in the contract.

Step 2: Ensure the Contract Includes a “Due Diligency” Clause

This is a huge part of selling—especially when it comes to commercial properties. If there are any contingencies, make sure that all parties are aware and properly informed about them.

Time and time again, we see even the most carefully planned closings fall apart as a result of contingency deadlines not being met!

Step 3: Keep Track of the Buyer

If the buyer is borrowing from a lender, you’ll want to check in with them to make sure they’re following through on all of their requirements. Lenders typically have a set of requirements for borrowers, and when buyers don’t adhere to them it is impossible to get the transaction approved before closing.

Periodically throughout the real estate transaction, contact the buyer’s representative to check that everything is going smoothly! Otherwise, it will be harder for the lender to get the title insurance underwritten and approved.

Step 4: Stay Ahead of Any Title Issues

If any issues with the property’s title arise during the transaction process, deal with them immediately. Work with the seller, the title agency, and the buyer representative to take care of any issues quickly.

Time is of the essence in any real estate transaction, so don’t get bogged down by procrastinating on important title issues!

Step 5: Keep Your Client Informed

Even as an experienced real estate agent, you know that the closing process can be confusing. That’s why you should do everything in your power to educate your client on the closing process.

When your client  knows exactly what to do during the closing, the entire process will go that much smoother!

Step 6: Thoroughly Review Closing Documents with Your Client

And, additionally, make sure that all parties are on the same page about closing! Coordinate all logistics, including closing date and time, and confirm it with the buyer, seller, and their representatives.

Step 7: Work with a Professional Title Insurance Agency

As a real estate agent, you’ll want to work closely with a title insurance agency to make sure the policy is effective and ready on time.

If you have any questions about the role title insurance plays in your real estate transaction, please don’t hesitate to give Tryon Title a call!