Frequently Asked Questions
What is a title search?
Research of public records confirming who owns the property and identifying liens, judgments, easements, or other encumbrances affecting title.
What is title insurance?
Coverage protecting against defects in the ownership history. The lender requires a policy protecting their interest; you can separately purchase an owner's policy.
Do I need an owner's policy?
It is generally optional but often advisable. It protects your equity against title defects that surface later, which the lender's policy does not cover.
What are common title problems?
Old liens that were never released, judgments against previous owners, boundary or easement issues, and errors in prior recorded documents.
How long does title work take?
Usually a week or two in parallel with underwriting. Problems discovered can extend this considerably depending on what needs resolving.
What if a title issue is found?
It must generally be resolved before closing. Old liens may need releases obtained, judgments may need payoff, and some issues require legal work.
Who chooses the title company?
Practices vary by state and sometimes by contract. In many transactions the buyer can choose; in others local custom or the contract governs.
What is escrow?
A neutral third party holding funds and documents until closing conditions are met, then disbursing according to the settlement statement.
Is escrow the same as a closing attorney?
Function is similar; who performs it varies by state. Some states use escrow or title companies, others use attorneys.
What is a settlement statement?
An itemization of all funds in the transaction — purchase price, loan proceeds, costs, credits, and what each party pays or receives.
When do I review the settlement statement?
Before closing. Review it carefully and question anything that differs from your expectations. Errors are correctable before signing, not after.
How do I send closing funds?
Typically by wire. Always verify wire instructions by phone with the title company using a number you obtained independently — wire fraud targets real estate closings.
What is wire fraud in real estate?
Criminals intercept or spoof closing communications and send fraudulent wire instructions. Verifying by phone with a known number is the standard protection.
Can I close remotely?
Often yes on investment property, through mail-away or remote online notarization depending on the state. Confirm early if you cannot attend.
What does the lender's title requirement include?
A commitment showing the lender will receive a first lien position, with any exceptions cleared or acceptable to them.
What is a first lien position?
The lender's claim ranks ahead of other liens on the property. Lenders require this, which is why existing liens must be resolved.
Do I need a survey?
Sometimes, depending on state practice and whether title raises boundary questions. Not universally required on residential investment property.
What happens to security deposits at closing?
On a tenanted purchase, they typically transfer to you as the new owner. This should appear on the settlement statement per state law.
What are transfer taxes?
State or local taxes on property transfer, varying enormously by jurisdiction. In some states they are a significant closing cost.
What should I watch for at closing?
That the settlement statement matches expectations, that wire instructions are verified independently, and that you understand what you are signing.
