Often, as a buyer or seller approach closing day, more and more questions arise about the actual process. What is title insurance for again? What do we need to do to get ready? How long is this going to take?
Kathy Kwak is the Director of Title Operations & Counsel at Proper Title in Chicago and an expert on explaining the closing process. Her straight-forward and upbeat demeanor keeps her clients feeling well-informed and well-prepared.
What exactly is title insurance?
Title insurance is a type of insurance that protects real estate owners and mortgage lenders from certain title risks and adverse interests. Generally speaking, title companies issue owner’s and loan policies. An owner’s policy would be insuring the new buyer/eventual owner of the real estate, and a loan policy would be insuring over the entity or lender that make mortgages on real estate. So, basically, if you’re a homeowner, you would want title insurance to make sure that after your closing date, if a person knocks on your door and claims to own your home, you would have insurance that would cover this claim. And, if you’re a lender, a lender would want title insurance to make sure that it has first lien rights against the real estate. For example, if the lender forecloses on the property, the lender wants to make sure that its lien or amount due on the loan is paid first before any other possible liens, like creditors and contractors.
The cost of an owner’s policy is on the seller to purchase for the buyer. The cost of a loan policy is on the buyer/borrower. In general, the cost of title insurance is not split between the parties (seller/buyer or lender/borrower).
Can homeowners add additional coverage to their policy?
A homeowner can add additional coverage to his/her/their policy if needed. There are various endorsements that can be added to any policy. The additional coverage is generally taken care of during the Attorney Review period where his/her/their attorney would request the specific coverage from the title company.
Is there anything a buyer can do to get prepared for the actual closing day?
A spa day?! In all seriousness, no matter if you’re a first time buyer or a seasoned buyer, the day of closing is always filled with nerves. It’s most likely THE biggest purchase a person can make these days. Having a good team (attorney and real estate agent) is the first step. Making sure to review and respond to document related issues in a timely matter is key. And of course closing at Proper Title (in and out within 45 minutes and sorry for the quick shout out!) or another reputable title company means closing day will be smooth, and you will feel more relaxed as your attorney goes through the loan documents with you. This day will become a part of your life journey, and a day that you won’t forget.
Closings can be notorious for taking forever. Are there better days of the week or times of the month to schedule a closing?
Like I mentioned above, closings at Proper Title have been known to take 45 minutes to an hour, max. Yes, it’s quite impressive. We have THE best closers in the industry, and our offices are set up to help you through your closing day. We have snacks, water, soda, working stations, and TVs. However, if you’re not closing at Proper, then in general, closings can take up to 2 hours or even more. The busiest time for closings are mid or end of the month. If your interest rate isn’t affected by the closing date, then I would recommend that you close in the beginning of the month. The first week of every month is generally the least busy. In general, I would speak to your lender, work out the best rate, and then ask for a recommended closing date.
Kathy is as enthusiastic(!) in person as she is in writing, and would gladly walk you through any questions you have about title insurance and the closing process. Contact Kathy at 312.967.0833 or firstname.lastname@example.org.