Episode Transcript
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Jim (00:00):
Welcome back to Jim sells
the Suncoast your go to guide
for all things real estate fromTampa to Port Charlotte.
Today we dive into a crucialaspect of the home buying and
selling title insurance andtitle companies and our chat
with Jim Todd hunt fromGulfwater title breaks down the
nitty gritty in plain English.
Title insurance isn't just afancy term.
(00:21):
It's your shield against theunexpected past claims or issues
with the property's ownershiphistory.
Todd walks us through theprocess from digging into the
property's background with atitle search, then navigating
common hurdles like familydisputes that can pop up from
past owners ever wonder aboutthe ins and outs of escrow
services or how to dodge wirefraud.
Todd's got you covered.
(00:42):
He emphasizes the importance ofclear communication between
buyers, sellers, and titlecompanies for a seamless closing
experience.
Plus, he clears up myths abouttitle insurance, reminding us
it's a one time safeguard foryour entire ownership.
Whether you're eyeing a cozyresale or a shiny new build,
understanding title insurance iskey.
So grab your coffee, sit back,demystify this essential part of
(01:05):
the real estate journey.
Let's dive in.
All right, and good morning andwelcome to Todd Hunt with
Gulfwater Tidal servicing WestCentral of Florida with tidal
concerns really could do thewhole state, but trying to put
that personal touch on it andkeeping it in the area.
Welcome, Todd, and thanks forjoining me.
Thanks, Jim.
Thanks for having me.
one of the things I myselfincluded when you look at title
(01:26):
you hear people talk about it,but really what does it do?
And how is it impacting thatbuying and selling process?
Tell me a little bit of whatrole does a title company play
in the home buying and sellingprocess?
Todd (01:37):
Yeah.
Two questions there.
What is title insurance?
And I'll take a step back andmost people understand insurance
as future risk.
Title insurance, however, isprior risk to you owning the
Property.
Okay.
So the person you are procuringthe property from, pays for your
(02:01):
owner's policy, for your titleinsurance and that's protecting
you as the new buyer to makesure that there are no
deficiency, defects, or what wecall clouds on the title.
Florida, we've got a lot ofpeople moving here.
You've got unfortunately deathand divorce.
(02:23):
So when you mix all that in yourproperty, let's say you buy an
existing home.
There could be some people outthere, some former family
members that might have rightsto the land or to the property.
So that's ultimately what titleis protecting you from someone
(02:45):
can't just show up at your doorand say, Hey, my great
grandfather, will this propertydown and I have rights to it.
So you either have to pay me the300, 000 or I'm going to take
the property.
And that's what title insuranceprotects you from.
Jim (03:02):
Okay.
Sounds like the beginning of amovie that we're going to see
somewhere.
Can you explain the process of atitle search and how it's
important?
Yeah, so a title search and thenhow is that important and what
kind of goes into that?
Todd (03:14):
Yep.
So title search follows thechain of title from each owner
that the property or the land orthe home has transferred from
person to make sure that no onehas rights to the property
outside of the buyer and theseller.
(03:36):
That's ultimately what a titlesearch does is the person that
is selling.
Owns the rights and is able tosell the property.
Jim (03:45):
Okay.
What are some of the commonissues you find during the title
search?
And then how do we resolve them?
Todd (03:51):
Common issues, like I
mentioned before, are divorce
and death.
So it's who has the right,especially if it's a family
owned property for generations,and it's just been, it was great
grandmother and greatgrandfather.
And there's five kids and 20grandkids and then 30 great
(04:15):
grandkids.
So it's ultimately who's do whatand who has rights to this.
And when you think about some ofthese family trees, they get
pretty, pretty long, so that'swhen we really have to roll up
our sleeves and figure out.
Who has the right to this
Jim (04:30):
property.
And I guess the flip side ofthat is you're verifying who has
the right or who legally doesnot have the right.
So you can say, no, they don'thave any claim or they have no
basis to make a claim.
And that's how you're verifyingthat, it's only legally entitled
to this buyer and this seller.
Correct.
What types of title insurancepolicies are available?
(04:52):
Owner's title, lender's title.
What's in each one and then howdo we determine the insurability
of either side?
Todd (05:00):
Yep, okay so our title
searches are done by our
underwriter At gulf water title.
Our main underwriter is firstamerican one of the larger
underwriters.
So they will perform a titlesearch and it typically goes
back to the last time title wasreviewed on this specific
(05:24):
property and then we go forwardto present day today.
So they're looking for how manytimes This has changed hands.
Any type of issues, probatethings of that nature where
there might be recorded death,divorce, new marriages things of
(05:45):
that nature the different types.
So standard for us here inFlorida is you have an owner's
policy.
Just like it sounds, everyonepretty much has an owner's
policy of their property.
And then if you have a mortgageor you took out a loan on this
property, your lender is goingto want a lender policy.
(06:08):
Owner's policy covers the listprice or the purchase price of
the property, and then thelender's policy covers the
amount of the loan on theproperty.
Jim (06:21):
Okay.
So similar, but one's strictlyreally looking at the loan and
the other one's looking at theowner?
The owner's policy protects theowner.
So how does the title companyhandle claims against the
lender?
If there's a claim against thetitle, how do you handle that?
Todd (06:39):
first thing, of course, we
would do is notify our
underwriter of a possiblesituation.
That in itself should cover theissue.
Additionally, each titleinsurance carries an additional
insurance here to air andemission things like that.
(06:59):
First thing to do is get ourunderwriter on the call and
raise our hand and say, Heythere's something going on.
We're going to need to look intothis.
So it's time is crucial at thatpoint.
Jim (07:09):
Okay.
What are some of the typicalcosts associated with title
insurance and how are theycalculated?
Todd (07:15):
So title insurance is
strictly based on the sale price
of the home.
The property.
it's called promulgated and it'sbased strictly on the sale price
on this property.
Luckily in today's society, Ihave a book that's about this
thick that will tell you to thedollar of every sale price
(07:37):
possible and what the rate wouldbe.
And then now with technology weuse what's called qualia.
I put it into our qualia systemand within seconds by the time I
pulled out the book, it'salready got my quote in front of
me.
Jim (07:52):
Okay.
So just wrapping up thatportion.
How do you ensure that title isclear as you're gonna go back
and check, county documents, anyrecords, any statements,
anything that would possiblyimpact that property from the
last time that basicallysomebody said, Hey, we're good
up to this point.
Todd (08:09):
Carrying it forward.
Yes, sir.
Our underwriter does reach outand goes through that
qualification process and it, alot of it is based on what is
recorded with the circuit courtany transfer of title and then,
of course any deathcertificates, any marriage
license, anything like thatwould be associated with that
(08:30):
property.
Jim (08:32):
Are liens going to have any
impact on the title as you're
doing your search?
Todd (08:38):
Yes.
And no.
When we're doing a title searcha mortgage is going to come up
because that's recorded.
A mechanics lien could berecorded.
So yes, that will play.
When I get a report back on aproperty, it will tell me
conditions and requirements.
What needs to happen to clearthis title to transfer to the
(09:01):
next owner and a lot of themwill say things like, this lean
has to be Payton full basically.
Of course there's a mortgagewith most properties.
So that's the first thing weneed a satisfaction of mortgage
from the previous lender.
And then we record that as well.
Jim (09:19):
And some of that will
happen at the closing, as you go
through and certain liens,
Todd (09:23):
smaller liens might not
show on the title search, but
they will come up.
Jim (09:29):
So what documents are
needed from the buyer and seller
to complete the title process?
What do they need to be able tobring or show or share so that
you have the information youneed for that search?
Todd (09:40):
The main.
Thing that I need and what I getbefore I start my searches is a
signed far bar contract.
Here in florida and then once Iget the deposit that kind of
gives me the green light tostart my search Everybody here
is serious and we're at thetable and you know in good faith
we're ready to make thistransaction move forward.
(10:02):
So when it comes to needinganything else.
I don't really need anythingelse besides that.
I might have to ask if it's sayin my grandfather's name and I'm
talking to my grandmother and mygrandfather passed away, I'm
going to need to record a deathcertificate.
(10:22):
I might need to record adivorce.
Certificate, things like that.
But to get the search started Ijust need the property address
and I can go from there.
Jim (10:33):
And so what you're looking
for then is the contract between
the buyer and seller thatestablishes, Hey, we're going to
do this sale.
And in the escrow earnestpayment.
That's Hey, they've got skin inthe game.
Now it's going forward.
That's your starter's gun thatsays, Hey, off and running.
And then any other documentationyou need, you may not know until
you run across looking for someconfirmation or looking for
(10:55):
something that shows what reallyhappened.
Todd (10:58):
Correct.
I'll pull the deed from theproperty appraisal website.
I'll pull the latest taxstatement to make sure again,
proper names, proper address,has it been paid in full things
like that.
But again Minimal, if I have thecontract to create a file in my
computer system and I hit submitthe underwriter can do all of
(11:21):
these searches without me.
A lot of times you don't want toget some of this information
from the seller, cause can'talways trust the seller in a
deal like that.
If that makes sense, you want tosee it with your own eyes.
Jim (11:37):
Yeah.
And official and legal, right?
Just because we think somethinghappened.
We want to verify it and getthat the T cross and the I
dotted.
What is the role of escrowservices that a title company
does?
What's involved in the escrowand how does that work or what
is that doing for you?
Todd (11:56):
Yep.
So the first thing that I dowhen I get a new contract is I'm
going to read through thecontract the name, the date,
figure out, what does escrow do,when is the inspection, the
closing date have all partiessigned and dated.
Then I get the escrow deposittypically within three days.
so I'll deposit that and makesure that clears.
(12:19):
And ultimately I am the unbiasedmiddleman between two parties.
So I hold the deposit, I holdthe contract, and whatever the
contract is stating legally ishow I dictate transaction's
gonna go.
And then how the.
At the end, how money isdispersed correctly per the
(12:42):
contract,
Jim (12:44):
right?
You're the referee making surethat it's a good game and
everybody.
lives up to what they'vepromised to do.
How do you coordinate with allthe different parties?
Obviously you've got the buyer,the seller, you could have
agents in there, you could havemortgage, you could have
insurance.
They're all coordinating basedon the one contract and you the
impartial referee coordinatingall this.
Todd (13:05):
Yeah, so my first two
calls are to the buyer's agent
and to the seller's agent.
Just to introduce myself, one ofthose two parties selected me,
so there should be at leastbeginning of a relationship
there.
Here's who I am, here's whatwe're gonna be doing per the
contract.
This is what I anticipate overthe next two weeks to two
(13:27):
months.
And then as long as they'recomfortable I ask for their
buyer and their seller contactinformation.
And then I do the same withthem.
I reach out, I introduce myselfand our company what they can
expect.
And then depending on what sideof the deal you're on is
determine the amount ofinformation I need from you.
(13:48):
A buyer, I need your lender.
If you're a seller, I need yoursocial security number so we can
notify and document for taxreasons.
And then of course, I would needyour lender on that side too, to
pay off any mortgages, thingslike that.
So there is some privateinformation We're big on
(14:10):
security and in documentcontrol.
Jim (14:13):
Good.
It leads me into my nextquestion really was asking what
steps we take to prevent fraud.
I know wire transfer fraud is abig one that's been in the news
and going around, I know there'ssteps to take for that.
And then privacy anddisclosures.
Todd (14:26):
Yep.
To start with wire fraud, that'sa huge thing that our industry.
I think is one of the biggesttargets for potential wire
fraud.
So the one thing that we do aremy email and my computer system
both have encryptions on it.
Hypothetically you come to mewith a deal and you're like, I
(14:47):
need your wiring instructionsand I'm not trying to be rude to
you, Jim, but I need to protectmy banking information.
I can only send this to yourcustomers, whether it's your
buyers or your sellers, and Isend them just to them and
encrypt it.
email that has our wiringinstructions.
my last four on my accountnumber is blacked out.
(15:12):
So your customer would then haveto call me to get those last
four digits.
And again that's not me tryingto be difficult to you.
That's me protecting yourclient's money.
And of course, my bankinformation,
Jim (15:24):
And quite honestly to
anybody that's listening that if
you're your agent saying, Hey,don't worry about it.
They'll send it to me and I'llget it to you.
That should be a red flag.
It's protected, it's private andit should be strictly just with
you.
Todd (15:37):
Most of our vendors are
pushing out information about
hacking, cyber attacks, fraud,these scams, these schemes.
So it's on the forefront of mymind most of the time is who's
asking for the information.
Is it really Jim Ahern?
I look at your email.
(15:59):
I might call you directly justto verify.
But yeah that's a seriousproblem and it needs to be
focused on when we're sendingout this information.
Jim (16:08):
How do you handle
discrepancies or issues that
arise during the closingprocess?
Todd (16:13):
So I'm trying to think of
discrepancies.
the main discrepancies are onthe lender side at the closing
table.
we invite the representatives onboth sides of the table so that
the seller's agent, the buyer'sagent are always welcome to come
(16:33):
to the closing.
If your lender is local, ofcourse, they're invited and they
know when our files are going toclose.
So we typically have a closerfor that bank or that
institution.
On standby.
They know that, on Monday atfour o'clock, we're going to be
closing, Mr.
(16:54):
John does file.
So someone is standing by toanswer those questions.
if something arises we handlethe documents, but some of the
documents aren't always ours.
So I don't always know exactfigures.
Exact language or terms thatwere discussed on the deal when
(17:14):
it comes to that lender and,what is this and why is this, I
thought it was going to be, X,this is Y.
So it's like, all right, let'spress pause.
Let's get your lender and makesure we're talking to the right
person who either has thoseanswers or can explain, why
there might be a discrepancy.
Jim (17:33):
advice do you have for
buyers and sellers to ensure a
smooth title transfer?
Todd (17:37):
Say one it's communication
we are going to, it's not like I
call you day one and then I callyou day 30 and that's it.
Throughout the process, we'reexplaining what we're doing what
type of information we need andwhy we need it.
So ultimately When you come tothe closing table, I've already
explained things three, four orfive times to, understand why
(18:00):
we're asking you to dosomething, why we need your
photo ID or your passport, whywe need your banking information
to transfer your proceedspreferably through a wire to
you.
So ultimately I would just say,ask questions.
Your realtor, your lender, andyour title contact should be
(18:20):
open and available to, to answerthose questions.
Some people change homes everytwo years.
Some people buy a house once andnever move, some technology.
the process.
You're forgetful.
My parents have been in the samehouse since I think 85.
So if I were to go and help themwith the transaction, I'm sure
(18:44):
it would be a lot differentquestions than say you, someone
who is in the field and doingthis on a daily basis.
Jim (18:52):
How does the process differ
for new construction homes
versus existing properties, oris there a difference?
Todd (18:58):
Ultimately, the process
isn't different.
I don't do a lot with newconstruction because a majority
of the developments, at least inour area, the developer has the
title company, they have thelender all under the same roof.
So they'll do a lot morebatching.
(19:18):
And they'll give the end userincentives to use everyone under
their roof.
So ultimately to me it's thesame.
But they just, they're selling200 properties within a couple
of year timeframe, all in thesame development.
Our closings, it's thisdevelopment, one house, that
development, one house, thisdevelopment, one house.
(19:40):
So each one of our transactionsseems to be a little bit
different.
It's not just rinse and repeat.
Jim (19:47):
Sure.
And when you're combiningdifferent, maybe different
lender, different agent,different everything, each time
there'd be some variations inthere.
So what are some commonmisconceptions about title
insurance and the role of titlecompanies.
Todd (20:01):
I would say some, if
you're buying a house in Florida
for cash.
You don't always need, it's notmandated that you have title
insurance.
However, If you go back.
Back to the beginning of ourconversation is what is title
(20:21):
insurance and why do you needit?
That is the person that I wouldsay needs it the most as if You
know you have no one elselooking out for you if you don't
have title insurance and someonecomes knocking on your door for
A one time fee for the entiretime you own this property, it
is your protection.
So that, that is the one thingit's not like life insurance,
(20:46):
car insurance, medicalinsurance, that you're paying a
monthly premium or annualpremium.
This is a one time fee thatprotects you for the life that
you own this property.
Jim (20:57):
And to your point, maybe
they're not thinking about them
when they buy it cash.
But when they go to sell it andsomebody's coming in with a
mortgage, now you've got thatextended period of time that's
gonna, that could cloud theissue, so to speak.
Todd (21:09):
Yeah, it could.
And it does periodically, butthat's why you trust the
professionals, you trust theteam that either you recommend
as a title agent or who theyselect or who the other party
selects.
But yeah, we're here to makesure that our customers and your
customers are protected and feelsecure when they are making that
(21:31):
biggest investment of theirlife, pretty much
Jim (21:35):
purchasing a
Todd (21:35):
new home.
Jim (21:37):
Yeah.
Todd, thank you so much.
I appreciate you spending thistime with me.
Anything else you want to saybefore we wrap up?
Todd (21:44):
Yeah, there's a lot of
changes in real estate.
Florida is always a hot market.
If you don't know, please reachout to me or someone.
I want everyone to be protectedand to understand what they are
doing.
The home buying process is veryexciting, but it's also very
(22:06):
stressful when you startassociating thousands, tens of
thousands, hundreds of thousandsof dollars.
So do your homework, understandwhat you're doing, making sure
you're going with a professionalorganization and raise your hand
your people that you're payingto do a job should be willing to
answer the questions and reallymake sure that you understand
(22:26):
the process and what you'rebeing asked to do.
Jim (22:31):
Todd, thank you.
I appreciate your time today.
And as always, thanks forlooking out for us.