To many, homebuying is a daunting, often confusing process. Admittedly, the myriad of documents requiring signatures can be overwhelming, especially for first-time homebuyers.
Thankfully, there are a number of online resources that can help homebuyers navigate the process. The American Land Title Association, alongside our real estate industry partners, are committed to making transactions easier for everyone through consumer education efforts.
One of the most important roles we play at ALTA is strongly encouraging buyers to shop around for their title insurance company. The Real Estate Settlement Procedures Act (RESPA) ensures that homebuyers always have the legal right to consider alternative title insurance providers and can never be forced into using a particular provider. Often the buyer asks the real estate agent or lender for a recommendation, but we always encourage buyers to explore their options.
Where should homebuyers start? Since 2015, ALTA has provided education through Home Closing 101, a consumer-focused website that provides information about the closing process, how they can protect their property rights, how to file a claim, and how to find a title company.
There are many factors to consider when selecting a title company, including local expertise, service standards, market conduct, and commitment to the community. Using Home Closing 101, consumers can contact local title agencies to compare rates and find a company that feels like the best fit for them.
Closing on a loan can vary from state to state, and even within the same county or city. Closings or settlements can be conducted by title companies, escrow companies, lenders, real estate brokers or attorneys. It’s important the buyer asks how the closing/settlement will be handled.
In addition, consumers should also know that who pays for title insurance varies from state to state. On the East Coast, the buyer typically pays. The seller normally pays on the West Coast. A discount may be available when both the owner’s and loan policy are purchased simultaneously.
Ask your title company who pays in your area and if a discount is available. It’s also important to note that the cost for title insurance may include other services provided by the title company such as the title search or conducting the closing. When comparing one rate to another, be sure to get detailed information on what is included in that rate, so comparisons are made equally.
Even though title insurance is a one-time fee, it provides lifelong protection, and many homeowners form long-term partnerships with their title and settlement companies. Just like any other important decision, ALTA encourages homeowners to do their own research – including looking up title companies on Home Closing 101 or even asking friends or family which providers they recommend.
Just as some consumers don’t realize they can shop around for their title insurance, many also fail to realize they can shop around for their mortgage. According to Fannie Mae, one third of American homebuyers only get one quote on their mortgage before choosing a lender.
Consumer education is key to helping homebuyers understand the many options they have at their disposal. That is why nearly a decade ago, ALTA launched the Homebuyer Outreach Program, a committee dedicated to developing content focused on educating consumers about homebuying, title insurance, and the closing process. The initiative provides real estate professionals with this content, so they can better educate the communities they serve.
ALTA has developed several multilingual documents to help educate potential homeowners whose primary language is not English. The material includes at least seven documents translated into the most popular languages spoken in America, including Arabic, French, German, Korean, Mandarin (Chinese), Spanish, Tagalog, and Vietnamese.
In addition to these resources, ALTA has recently developed documents to help explain what happens after a real estate closing and when a mortgage is paid off.
When closing on a home, many potential buyers are often left confused and overwhelmed by the process. ALTA, on behalf of the title industry, is committed to reducing this confusion, and we take the responsibility of helping navigate buyers through the process. Our goal is to improve homebuyer education and reduce barriers to homeownership, so everyone has access to the American dream of owning a home.
Diane Tomb is CEO of the American Land Title Association.
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