Put It on the Line: Tips for Buying a Home Through a Closing Company

Buying a home is a major step in your path, whether it’s your first home or your third mountain retreat. You’re signing your name to a significant legal document that is the start of your new dream! How do you avoid that dream turning into a nightmare? Here are a few tips I’ve picked up through my experiences as a title opinion paralegal.

• Be sure that the seller has told your closing company what their current marital status is. This may seem like a no-brainer, but there’s a reason it’s in this list. If a title search or the abstract says that the current owner is Mr. Baker but Mr. Baker has a wife, there may be some extra information needed in the documents. Some states, such as Iowa, view residential property ownership as a shared issue and the seller’s spouse will need to sign over the property as well—even if they weren’t on the deed when the seller bought the property. Without this extra info up-front, you may learn on closing day that, surprise, someone else has claim on the property.
• Even though the purchase will go under multiple sets of eyes, check that all names are correct and appear as you want them to, right down to how you want your middle name to appear (or not). A misspelling or omission of letters that makes it into the signed documents can have reaching effects, with extra paperwork needed to prove same-person identity.
• Have a survey of the property done. If the neighbor’s deck encroaches onto your property, it may impact an appraiser’s valuation or your future sale of the property.
• A title search by a lender usually catches legal claims and rights to the property, and Lender’s Title Insurance covers their stake in the loan if something is missed. You as the buyer/new owner can purchase Owner’s Title Insurance, which will typically protect you against numerous claims, zoning problems, deed mistakes, or other issues that could be missed during the title search but reveal their frustrating presence after signing. Without insurance, you could be stuck with a costly bill to fix an issue that may have been covered by someone else before signing. (In Iowa, Iowa Title Guaranty plays this role.)
• Even if you decide to tackle the home buying process on your own without the assistance of a closing company, strongly consider hiring a real estate attorney to review and advise on the myriad documents that the process entails. The attorney will check the paperwork to make sure things are in place and no surprises are lurking. Many will even sit with you during the signing to be an advocate for any last-minute information brought to light. Remember, once the signatures are on the paper, it will much more difficult to rectify a wrong. Don’t think to yourself during the final walk-through, “I’ll talk to them about that ceiling crack later.” You might have a rough go if you ask the seller to fix the crack after you’ve legally bought the house.

Of course there are potential pit-falls to be wary of when buying a home, but keeping your eyes open for some of these more common issues can help keep your path headed in the right direction. For more information about how our attorney-led real estate closing team can help you with your home, contact our Sioux City, Sioux Falls, or Omaha law firm location today!