A New Jersey title company is a necessary and important party in every sale or purchase of real estate. Not only does it perform title search and issue title insurance, but it also handles a big portion of the paperwork, files documents with appropriate agencies and often maintains escrow accounts by holding and distributing funds per buyer’s and seller’s instructions. Needless to say, it’s in both seller’s and buyer’s best interest to select a reliable and reputable title company. But who does the choosing?
Choosing a Title Company in New Jersey
In most states, the person who pays for title insurance typically chooses the title company. In New Jersey, this expense is traditionally covered by the buyer, so the buyer usually selects the title company. However, keep in mind that there are two parts to title insurance—the owner’s policy and the lender’s policy. The payment for both can be split between the two parties, in which case the seller gets a bigger say in which title company to use.
You Have the Freedom to Choose
Keep in mind, that whether you are the seller or the buyer, you have the absolute right to advocate your own title company selection if you have a strong opinion on this matter. Sometimes, your real estate agent, broker or even your lender may attempt to work their title company of choice into the contract. Remember that they can’t force their decision on you—all they can do is recommend. And while they may have their reasons to suggest the title company they selected, it pays to do your research before you agree to anything, even if it’s a company recommended by your own real estate agent.
What if The Seller Insists?
In states like New Jersey where the title company selection is traditionally left to the buyer, the seller may still counter-offer to use their title company. They can’t make it a condition of the sale, as it will count as a RESPA violation, but they can certainly ask. What should you do in this situation?
- Ask the seller to justify their request. Sometimes, they may propose to use the company that handled their transaction when they first bought the property and, therefore, already has a background knowledge.
- Research the proposed title company. Read their website and online reviews, ask questions and don’t be afraid to ask for references.
If the seller’s title company seems to be experienced in your particular real estate transaction, such as a short sale, then it could be a good choice. However, if you suspect that the seller might have a hidden agenda and the title company is siding with them, then you have the right to go with your own selection.
Finding a Compromise
Remember: everything is negotiable. If you feel like you, as a buyer or a seller, don’t trust the other party’s choice of New Jersey title company, don’t hesitate to voice your concerns. Sometimes, you might be able to trade something else for having the transaction go your way. In other cases, both of you can stay with your own opinions and use two separate title companies. While it will be more expensive and may potentially complicate and prolong the transaction, it is still an option that might work for you.
So, going back to the title of this post: yes, you can choose your own title company. And if you decide to go with Armour Title, we can promise you professional and impartial title services and a team of experienced staff always ready to answer your questions.