Title Insurance Companies ft. Todd Huntt from Gulf Water Title

In this episode of Jim Sells the Suncoast, host Jim Ahearn dives into the complexities of title insurance with Todd Hunt from Gulf Water Title. Todd explains the essential role that title insurance plays in protecting homebuyers from potential issues related to property ownership history, and he breaks down the title search process in simple terms.

Listeners will gain a deeper understanding of how title insurance acts as a safeguard against unexpected claims, family disputes, and ownership challenges. Todd also provides valuable insights into the differences between owner’s and lender’s policies, the costs involved in securing title insurance, and the role of escrow services. He shares practical tips on navigating wire fraud, ensuring clear communication during the closing process, and avoiding common misconceptions about title insurance. Whether you’re buying a resale or new construction home, Todd emphasizes the importance of having professional title services for a smooth and secure transaction.

Key Takeaways:

• The importance of title insurance in protecting property ownership rights
• Overview of the title search process and common issues that can arise
• Differences between owner’s and lender’s title insurance policies
• Costs associated with title insurance and how they are calculated
• The role of escrow services and preventing wire fraud during transactions
• Advice for buyers and sellers on ensuring a smooth title transfer
• Common misconceptions about title insurance and why it’s a one-time safeguard

What's Next?
Follow Jim Sells the Suncoast for expert advice on navigating Florida's real estate market and ensuring a seamless home-buying experience.

Looking to buy or sell a home on the Suncoast? Reach out to Jim at jim.ahearn@gmail.com or visit his website, Jim Sells the Suncoast

In need of title insurance? Reach out to Todd and mention Jim sent you to get the VIP treatment! Connect via email at Todd@GulfWaterTitle.com or visit his website, Gulf Water Title

A Personal Note from Jim:

Hey there, I’m Jim Ahearn, your go-to real estate guide and host of Jim Sells The Suncoast podcast! 🎙️✨ Dreaming of Florida life? I’ve got you covered! As your dedicated buyer's agent, I’ll handle everything from walk-throughs to closing, making your home-buying journey as smooth as a Florida breeze.

Whether you're local or tuning in from afar, I’ll bring the Suncoast to you with virtual tours and expert advice. Let’s chat about your dream home and I'll connect you with all the right people to make it happen.

Ready to move to paradise? Drop me a line – I can’t wait to help! 🌴🏡

Transcript

Jim: 0:00

Welcome back to Jim sells the Suncoast your go to guide for all things real estate from Tampa to Port Charlotte. Today we dive into a crucial aspect of the home buying and selling title insurance and title companies and our chat with Jim Todd hunt from Gulfwater title breaks down the nitty gritty in plain English. Title insurance isn't just a fancy term. It's your shield against the unexpected past claims or issues with the property's ownership history. Todd walks us through the process from digging into the property's background with a title search, then navigating common hurdles like family disputes that can pop up from past owners ever wonder about the ins and outs of escrow services or how to dodge wire fraud. Todd's got you covered. He emphasizes the importance of clear communication between buyers, sellers, and title companies for a seamless closing experience. Plus, he clears up myths about title insurance, reminding us it's a one time safeguard for your entire ownership. Whether you're eyeing a cozy resale or a shiny new build, understanding title insurance is key. So grab your coffee, sit back, demystify this essential part of the real estate journey. Let's dive in. All right, and good morning and welcome to Todd Hunt with Gulfwater Tidal servicing West Central of Florida with tidal concerns really could do the whole state, but trying to put that personal touch on it and keeping it in the area. Welcome, Todd, and thanks for joining me. Thanks, Jim. Thanks for having me. one of the things I myself included when you look at title you hear people talk about it, but really what does it do? And how is it impacting that buying and selling process? Tell me a little bit of what role does a title company play in the home buying and selling process?

Todd: 1:37

Yeah. Two questions there. What is title insurance? And I'll take a step back and most people understand insurance as future risk. Title insurance, however, is prior risk to you owning the Property. Okay. So the person you are procuring the property from, pays for your owner's policy, for your title insurance and that's protecting you as the new buyer to make sure that there are no deficiency, defects, or what we call clouds on the title. Florida, we've got a lot of people moving here. You've got unfortunately death and divorce. So when you mix all that in your property, let's say you buy an existing home. There could be some people out there, some former family members that might have rights to the land or to the property. So that's ultimately what title is protecting you from someone can't just show up at your door and say, Hey, my great grandfather, will this property down and I have rights to it. So you either have to pay me the 300, 000 or I'm going to take the property. And that's what title insurance protects you from.

Jim: 3:02

Okay. Sounds like the beginning of a movie that we're going to see somewhere. Can you explain the process of a title search and how it's important? Yeah, so a title search and then how is that important and what kind of goes into that?

Todd: 3:14

Yep. So title search follows the chain of title from each owner that the property or the land or the home has transferred from person to make sure that no one has rights to the property outside of the buyer and the seller. That's ultimately what a title search does is the person that is selling. Owns the rights and is able to sell the property.

Jim: 3:45

Okay. What are some of the common issues you find during the title search? And then how do we resolve them?

Todd: 3:51

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 great grandfather. And there's five kids and 20 grandkids and then 30 great grandkids. So it's ultimately who's do what and who has rights to this. And when you think about some of these family trees, they get pretty, pretty long, so that's when we really have to roll up our sleeves and figure out. Who has the right to this

Jim: 4:30

property. And I guess the flip side of that is you're verifying who has the right or who legally does not have the right. So you can say, no, they don't have any claim or they have no basis to make a claim. And that's how you're verifying that, it's only legally entitled to this buyer and this seller. Correct. What types of title insurance policies are available? Owner's title, lender's title. What's in each one and then how do we determine the insurability of either side?

Todd: 5:00

Yep, okay so our title searches are done by our underwriter At gulf water title. Our main underwriter is first american one of the larger underwriters. So they will perform a title search and it typically goes back to the last time title was reviewed on this specific property and then we go forward to present day today. So they're looking for how many times This has changed hands. Any type of issues, probate things of that nature where there might be recorded death, divorce, new marriages things of that nature the different types. So standard for us here in Florida is you have an owner's policy. Just like it sounds, everyone pretty much has an owner's policy of their property. And then if you have a mortgage or you took out a loan on this property, your lender is going to want a lender policy. Owner's policy covers the list price or the purchase price of the property, and then the lender's policy covers the amount of the loan on the property.

Jim: 6:21

Okay. So similar, but one's strictly really looking at the loan and the other one's looking at the owner? The owner's policy protects the owner. So how does the title company handle claims against the lender? If there's a claim against the title, how do you handle that?

Todd: 6:39

first thing, of course, we would do is notify our underwriter of a possible situation. That in itself should cover the issue. Additionally, each title insurance carries an additional insurance here to air and emission things like that. First thing to do is get our underwriter on the call and raise our hand and say, Hey there's something going on. We're going to need to look into this. So it's time is crucial at that point.

Jim: 7:09

Okay. What are some of the typical costs associated with title insurance and how are they calculated?

Todd: 7:15

So title insurance is strictly based on the sale price of the home. The property. it's called promulgated and it's based strictly on the sale price on this property. Luckily in today's society, I have a book that's about this thick that will tell you to the dollar of every sale price possible and what the rate would be. And then now with technology we use what's called qualia. I put it into our qualia system and within seconds by the time I pulled out the book, it's already got my quote in front of me.

Jim: 7:52

Okay. So just wrapping up that portion. How do you ensure that title is clear as you're gonna go back and check, county documents, any records, any statements, anything that would possibly impact that property from the last time that basically somebody said, Hey, we're good up to this point.

Todd: 8:09

Carrying it forward. Yes, sir. Our underwriter does reach out and goes through that qualification process and it, a lot of it is based on what is recorded with the circuit court any transfer of title and then, of course any death certificates, any marriage license, anything like that would be associated with that property.

Jim: 8:32

Are liens going to have any impact on the title as you're doing your search?

Todd: 8:38

Yes. And no. When we're doing a title search a mortgage is going to come up because that's recorded. A mechanics lien could be recorded. So yes, that will play. When I get a report back on a property, it will tell me conditions and requirements. What needs to happen to clear this title to transfer to the next owner and a lot of them will say things like, this lean has to be Payton full basically. Of course there's a mortgage with most properties. So that's the first thing we need a satisfaction of mortgage from the previous lender. And then we record that as well.

Jim: 9:19

And some of that will happen at the closing, as you go through and certain liens,

Todd: 9:23

smaller liens might not show on the title search, but they will come up.

Jim: 9:29

So what documents are needed from the buyer and seller to complete the title process? What do they need to be able to bring or show or share so that you have the information you need for that search?

Todd: 9:40

The main. Thing that I need and what I get before I start my searches is a signed far bar contract. Here in florida and then once I get the deposit that kind of gives me the green light to start my search Everybody here is serious and we're at the table and you know in good faith we're ready to make this transaction move forward. So when it comes to needing anything else. I don't really need anything else besides that. I might have to ask if it's say in my grandfather's name and I'm talking to my grandmother and my grandfather passed away, I'm going to need to record a death certificate. I might need to record a divorce. Certificate, things like that. But to get the search started I just 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 that establishes, Hey, we're going to do this sale. And in the escrow earnest payment. That's Hey, they've got skin in the game. Now it's going forward. That's your starter's gun that says, Hey, off and running. And then any other documentation you need, you may not know until you run across looking for some confirmation or looking for something that shows what really happened.

Todd: 10:58

Correct. I'll pull the deed from the property appraisal website. I'll pull the latest tax statement to make sure again, proper names, proper address, has it been paid in full things like that. But again Minimal, if I have the contract to create a file in my computer system and I hit submit the underwriter can do all of these searches without me. A lot of times you don't want to get some of this information from the seller, cause can't always trust the seller in a deal like that. If that makes sense, you want to see it with your own eyes.

Jim: 11:37

Yeah. And official and legal, right? Just because we think something happened. We want to verify it and get that the T cross and the I dotted. What is the role of escrow services that a title company does? What's involved in the escrow and how does that work or what is that doing for you?

Todd: 11:56

Yep. So the first thing that I do when I get a new contract is I'm going to read through the contract the name, the date, figure out, what does escrow do, when is the inspection, the closing date have all parties signed and dated. Then I get the escrow deposit typically within three days. so I'll deposit that and make sure that clears. And ultimately I am the unbiased middleman between two parties. So I hold the deposit, I hold the contract, and whatever the contract is stating legally is how I dictate transaction's gonna go. And then how the. At the end, how money is dispersed correctly per the contract,

Jim: 12:44

right? You're the referee making sure that it's a good game and everybody. lives up to what they've promised to do. How do you coordinate with all the different parties? Obviously you've got the buyer, the seller, you could have agents in there, you could have mortgage, you could have insurance. They're all coordinating based on the one contract and you the impartial referee coordinating all 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 of those two parties selected me, so there should be at least beginning of a relationship there. Here's who I am, here's what we're gonna be doing per the contract. This is what I anticipate over the next two weeks to two months. And then as long as they're comfortable I ask for their buyer and their seller contact information. And then I do the same with them. I reach out, I introduce myself and our company what they can expect. And then depending on what side of the deal you're on is determine the amount of information I need from you. A buyer, I need your lender. If you're a seller, I need your social security number so we can notify and document for tax reasons. And then of course, I would need your lender on that side too, to pay off any mortgages, things like that. So there is some private information We're big on security and in document control.

Jim: 14:13

Good. It leads me into my next question really was asking what steps we take to prevent fraud. I know wire transfer fraud is a big one that's been in the news and going around, I know there's steps to take for that. And then privacy and disclosures.

Todd: 14:26

Yep. To start with wire fraud, that's a huge thing that our industry. I think is one of the biggest targets for potential wire fraud. So the one thing that we do are my email and my computer system both have encryptions on it. Hypothetically you come to me with a deal and you're like, I need your wiring instructions and I'm not trying to be rude to you, Jim, but I need to protect my banking information. I can only send this to your customers, whether it's your buyers or your sellers, and I send them just to them and encrypt it. email that has our wiring instructions. my last four on my account number is blacked out. So your customer would then have to call me to get those last four digits. And again that's not me trying to be difficult to you. That's me protecting your client's money. And of course, my bank information,

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'll get it to you. That should be a red flag. It's protected, it's private and it 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 my mind most of the time is who's asking for the information. Is it really Jim Ahern? I look at your email. I might call you directly just to verify. But yeah that's a serious problem and it needs to be focused on when we're sending out this information.

Jim: 16:08

How do you handle discrepancies or issues that arise during the closing process?

Todd: 16:13

So I'm trying to think of discrepancies. the main discrepancies are on the lender side at the closing table. we invite the representatives on both sides of the table so that the seller's agent, the buyer's agent are always welcome to come to the closing. If your lender is local, of course, they're invited and they know when our files are going to close. So we typically have a closer for that bank or that institution. On standby. They know that, on Monday at four o'clock, we're going to be closing, Mr. John does file. So someone is standing by to answer those questions. if something arises we handle the documents, but some of the documents aren't always ours. So I don't always know exact figures. Exact language or terms that were discussed on the deal when 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's press pause. Let's get your lender and make sure we're talking to the right person who either has those answers 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 call you day 30 and that's it. Throughout the process, we're explaining what we're doing what type of information we need and why we need it. So ultimately When you come to the closing table, I've already explained things three, four or five times to, understand why we're asking you to do something, why we need your photo ID or your passport, why we need your banking information to transfer your proceeds preferably through a wire to you. So ultimately I would just say, ask questions. Your realtor, your lender, and your title contact should be open and available to, to answer those questions. Some people change homes every two years. Some people buy a house once and never move, some technology. the process. You're forgetful. My parents have been in the same house since I think 85. So if I were to go and help them with the transaction, I'm sure it would be a lot different questions than say you, someone who is in the field and doing this on a daily basis.

Jim: 18:52

How does the process differ for new construction homes versus existing properties, or is there a difference?

Todd: 18:58

Ultimately, the process isn't different. I don't do a lot with new construction because a majority of the developments, at least in our area, the developer has the title company, they have the lender all under the same roof. So they'll do a lot more batching. And they'll give the end user incentives to use everyone under their roof. So ultimately to me it's the same. But they just, they're selling 200 properties within a couple of year timeframe, all in the same development. Our closings, it's this development, one house, that development, one house, this development, one house. So each one of our transactions seems to be a little bit different. It's not just rinse and repeat.

Jim: 19:47

Sure. And when you're combining different, maybe different lender, different agent, different everything, each time there'd be some variations in there. So what are some common misconceptions about title insurance and the role of title companies.

Todd: 20:01

I would say some, if you're buying a house in Florida for cash. You don't always need, it's not mandated that you have title insurance. However, If you go back. Back to the beginning of our conversation is what is title insurance and why do you need it? That is the person that I would say needs it the most as if You know you have no one else looking out for you if you don't have title insurance and someone comes knocking on your door for A one time fee for the entire time you own this property, it is your protection. So that, that is the one thing it's not like life insurance, car insurance, medical insurance, that you're paying a monthly premium or annual premium. This is a one time fee that protects 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 and somebody's coming in with a mortgage, now you've got that extended period of time that's gonna, that could cloud the issue, so to speak.

Todd: 21:09

Yeah, it could. And it does periodically, but that's why you trust the professionals, you trust the team that either you recommend as a title agent or who they select or who the other party selects. But yeah, we're here to make sure that our customers and your customers are protected and feel secure when they are making that biggest investment of their life, 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 this time with me. Anything else you want to say before 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 reach out to me or someone. I want everyone to be protected and to understand what they are doing. The home buying process is very exciting, but it's also very stressful when you start associating thousands, tens of thousands, hundreds of thousands of dollars. So do your homework, understand what you're doing, making sure you're going with a professional organization and raise your hand your people that you're paying to do a job should be willing to answer the questions and really make sure that you understand the process and what you're being asked to do.

Jim: 22:31

Todd, thank you. I appreciate your time today. And as always, thanks for looking out for us.