1. What should a title company do for you?

Review your sales contract, confirm property information and ownership, work with lenders to ensure all requirements are met, notify all parties and assist in resolving any title issues.  Additionally, your title company should coordinate with buyers, sellers, real estate agents, and lenders to ensure that the closing goes smoothly, record documents, disburse funds in accordance with the settlement statement, and hold funds in escrow in accordance with buyer, seller and lender instructions.  Your title company should work for you to ensure your settlement date goes as planned.

2. What is a title search?

Upon receipt of the initial order, a title search is performed for the property. Our abstractors conduct a search of the land, judgment and other official records of the county in which the property is located, and generate a comprehensive report outlining what the search uncovers. 

3. Do I have to have a title search?

A title must be deemed "good and marketable" before the settlement process can continue. The result of the title search identify: the current record owner of the property; any liens on it; and any limits on how an owner can use the property. We will examine and confirm the documents and information in the title search report to determine what, if anything, must be done in order to clear the title to the property, so that the buyer can obtain its (and its lender's) goal of "good and marketable" title.

4. What is title insurance, and do I need it?

Title insurance protects against a loss to the lender or the owner in the event that the title to the property is other than as insured. Title insurance is an essential part of virtually every transfer of ownership of residential or commercial real estate. It is purchased at settlement, and the title insurance policies are issued shortly thereafter. Buyers should be aware that it protects them against potentially disastrous losses. There are two types of title insurance policies: lenders and owners. Lenders title insurance is required by lenders to protect their interest in the property from possible title defects. Buyers have the option of purchasing owner's title insurance to protect the buyer's investment, which often is greater than the loan on the property. While the lenders policy expires when the loan is paid off, the owners policy coverage can continue as long as the owner has a vested interest in the property, and depending upon the type of owners coverage purchased, potentially longer. With both owners and lenders title insurance there are essentially two levels of coverage, Basic and Enhanced. Some lenders require coverage to be at the Enhanced level; others only require Basic coverage. Owners can elect whether to obtain Basic or Enhanced coverage, or none at all. It is important to know that title insurance premiums are paid only once, at the closing. Owner's title insurance may be purchased after the closing, but only after another full title search is undertaken and any necessary affidavits are executed.

5. What happens at settlement?

At settlement, your Competitive Title settlement officer "closes" the transaction by explaining (as permitted under local law) each of the closing documents and ensuring the buyer and seller sign each where required. The settlement officer will also review with the parties a settlement statement (HUD-1) which shows how all of the settlement funds are to be allocated. The parties' respective shares of the closing costs are outlined in the sales contract. Closing for a purchase may include state and local government transfer and recordation taxes and fees, lender and broker fees, real estate commissions, municipal charges, bills for inspections and surveys, homeowner insurance premiums, lenders' and owners' title insurance premiums, title company charges, real property taxes, homeowners' or condominium association dues or assessments, and any other invoices or items to be paid or adjusted at closing. Funds are often held in escrow to respond to various items or circumstances agreed to in advance by the parties. Whenever possible, parties to the transaction are provided a draft copy of the HUD-1 form well in advance of closing for their review. Once the parties approve the figures on the settlement statement, the settlement officer will collect all necessary funds and then disburse them in accordance with the settlement statement.

6. What do I need to bring to settlement?

All parties must bring a valid government issued photo identification such as a driver's license or passport to the closing.  Social Security cards are also required by certain lenders. Buyers must bring sufficient good funds to consummate the transaction. This is usually done by a cashier's or certified check made out to the title company or wire transfer. If the buyer brings more than the amount required to close, the title company will issue a check or wire for the excess. Buyers should have already provided Competitive Title Agency a completed Choice of Tenancy Form. This form is provided to all buyers named in the sales contract shortly after we obtain a copy of the contract. It instructs us how title will be held and thus how the deed should be prepared. In the event there is a change in plans, we will need another Choice of Tenancy form signed by all buyers named in the sales contract. Homeowners who are refinancing and taking cash out and wish to have the funds wired should bring wiring instructions, voided check and or a deposit slip to closing. We recommend you confirm in advance that the bank routing information is correct. The State of Maryland requires title companies to withhold a portion of the sales proceeds from sellers of Maryland real estate who are not Maryland residents (certain exceptions apply).  

7. Who will be at settlement / closing?

Unless otherwise agreed, all buyers, sellers, and their respective real estate agents will attend the closing which is conducted by the title company. Lender representatives occasionally attend.

8. How long does settlement / closing take?

A refinance closing takes approximately 1 hour and the settlement of a sale and or purchase lasts approximately one hour to one and a half hours.  If there are any complications or if there are several buyers / sellers, it could take longer to get through everything thoroughly. Every borrower will be provided with an entire copy package on the day of closing.  For refinances, during your three (3) day rescission period, feel free to contact our office with questions or concerns.  We will work with you through any issue until you feel certain and comfortable with your transaction.

9. What if I am not able to attend settlement / closing?

It is always best if the owner and or buyer themselves are at settlement / closing.  However, if you cannot attend the closing, a Power of Attorney may be permitted. This requires you to formally appoint someone, such as a spouse or other relative / friend to sign all the documents on your behalf. This person would need to attend the closing in your place and bring the appropriate identification with them. However, the use of a Power of Attorney must first be approved by the lender.  This is sometimes difficult and time consuming.  If a Power of Attorney is permitted, please let us know right away who will be attending settlement-and signing on your behalf-so that an appropriate Power of Attorney can be prepared and/or reviewed prior to the closing.  With the passing of the "General and Limited Power of Attorney Act" (Loretta's Law) there are statutory forms available that are required to be accepted anywhere in Maryland.