Title Insurance Agencies And The Foreign Investor

With the myriad rules and regulations governing United States real estate transactions, it is no wonder that a foreign investor or seller has questions.  Sometimes the regulations make sense to investors and are similar to the laws in their home country.  Other times, the laws are unique to the U.S. and leave the foreign investor with more questions than answers.

One way to navigate these regulations and make sure your real estate transaction goes smoothly is to work with a professional real estate title insurance agency.  Title insurance agencies are separate from the real estate company and the mortgage lender.  In fact, the primary role of the title agency is to remain impartial to all parties involved in the transaction.  Their primary role is to make sure the closing happens and that everyone involved meets all obligations.  If you are looking for impartial assistance with your real estate investment, you can’t go wrong consulting a title agent.

Foreign Seller Services

Our Fort Myers and Cape Coral title insurance agency handlforeignworldpicturees many real estate transactions involving foreign sellers and investors each year.  Being located in Florida, we have many clients who enjoy vacation homes in the state, which keeps us current on foreign seller real estate regulations like FIRPTA.

The Foreign Investment in Real Property Tax Act of 1980, as FIRPTA is properly known, requires the foreign seller of any property (other rules apply) to withhold 10% of the purchase price and remit it to the IRS for tax purposes.

A title agency can help with this in several ways.  To begin with, the seller must be identified as a foreign seller for FIRPTA to have an impact on the sale.  Title Junction can verify identities and can be counted on to verify if the sellers involved in the transaction indeed qualify as a foreign seller.

Many title agencies also act as the escrow agent in the real estate transaction, which would allow the agency to withhold the 10% tax and remit it to the IRS on behalf of the seller.

All-In-One Convenience

Our foreign seller clients often appreciate the convenience of having all real estate title and title insurance needs under one roof.  Closing, title insurance, escrow and notary services in one location help make the transaction go smoothly.  A title agency can also:  help a foreign seller or foreign investor navigate real estate and closing terminology, assist with communication between buyers and sellers, their agents and their lenders and ensure both parties meet the legal requirements of FIRPTA.

Finding A Qualified Agency

When buying or selling a property, it is important to have both a title agency you can trust and one with the experience you need.  This is especially true if you are a foreign seller in the United States.  You can find qualified agencies through referrals from your realtor, mortgage lender and friends and family, the Better Business Bureau and the local Chamber of Commerce.  Finally, be sure your agency is professionally recognized and up-to-date with all current rules and regulations governing the real estate industry.

Top 4 Real Estate Closing Documents you should read through

When you are selling or buying a home you can almost always expect a mountain of paperwork to sign throughout the process and at the closing table.  And if you are like most, you don’t read every document before signing it.  However, there are a few documents you are going to sign throughout the process that you should definitely read fully and understand before signing.

1.  Purchase Agreement – This is your “contract” or “agreement of sale”.  This is definitely one of the most important documents in the transaction.  This spells out all the important details such as a financing contingency, inspection contingency, appraisal contingency, sales price, and also what each party, the buyers and the sellers, are paying in regards to closing cost.

2.  Title Commitment – The title commitment makes sure the property you are buying is free and clear of all liens and legal encumbrances. A title search is completed to prepare the commitment to insure. This will allow all parties to see what needs to be completed before you get to the closing table and clearly sets out any title issues.

3.  Promissory Note – It is just as is sounds.  It states that you promise to pay back the loan on your property or the bank is coming to get it. It details all of your loan terms, from the amount to the date to pay.

4.  Property Deed – This document lists on it the owner of the property whom is giving their interest to the new buyer or borrower, along with a legal description of the property.  The deed also gets recorded at the county courthouse to become public record to let everyone know who owns the property.

It is very important that you are aware of these documents and what they mean. Your realtor and your title company should be able to review these with you.

How Does Title Insurance Protect Me?

Title insurance is an important investment in your property.  The indemnity policies are designed to protect you from losses due to defects in the title, which occurred before you took ownership of the property.  Although claims against a property are rare, you might find yourself involved in one and should know what to do if that happens.

Determine Your Losses and Exclusions

It is very important to determine whether or not you’ve suffered a loss as a result of the claim against the property.  Without a proven loss, the policy is unenforceable.  Losses typically take the form of loss of use or financial loss.  Also important, check your policy to see if the claim being made against the property was listed as an exclusion.  It’s possible the defect was found during your title search, but you’ve forgotten about it.  If it was discovered during the title search, the defect would have been corrected or added to the policy as an exclusion. If it is an exclusion, it will not be covered by the title insurance policy.

If you’ve determined that you have suffered a loss and the claim is not listed as an exclusion, you should contact your title insurance agency as soon as you discover the loss.

Let The Title Insurance Agency Take Over

The agent will probably ask you to provide written documentation and proof of loss before the claim is investigated.  Specific details about how to file a claim with your particular title insurance agency can be found in your title insurance policy, which you were given a copy of when you closed on the property.

At Title Junction, our Fort Myers title insurance agents are well-versed in how to handle claims against a property.  Your situation will be investigated; the policy and its exclusions examined and the agency will determine whether or not the loss will be covered by the policy.  You will receive written notice explaining why or why not your claim will be covered.

Fortunately, the same policy that protects you from defects in the title also commits the insurance company to defend you from claims made against the property.  Even if the agency ultimately determines that no loss has occurred, they are still required to defend you against the claim.  This may mean litigation or it may be resolved without going to court.  Either way, you can rest assured that someone familiar with the intricacies of title insurance and property law will be representing you.

Choose The Right Agency

Throughout Florida and in Fort Myers, escrow and title insurance agencies can be chosen by the seller or buyer, although many simply choose to go with the agency recommended by their realtor or lender.  Representing you throughout a claim is just one reason you should do your research and choose a title insurance agency that you feel comfortable with and one that has the expertise you want.  There may come a time when you will appreciate a company that prides itself on customer service and satisfaction.