5 Questions To Ask A Title Company When Buying Land

Whether it's your first time buying a piece of land, or if you are a seasoned professional, you will inevitably be going through a title company and/or title attorney to close the deal.  The questions below are 5 big ones to ask any title company that you hire.

1. What is the cost of title insurance?

Title insurance protects you against financial losses if there are any defects in the title to the land. The cost of title insurance varies depending on the location of the land and the amount of coverage you purchase.  This is typically how title companies make most of their money, so be sure to shop around, or ask if the cost of the insurance is negotiable.  Or you can even ask to forgo title insurance altogether - but we don't recommend it.

2.  What is the process for closing on the land?

The closing is the final step in the land purchase process. It is when you will sign all of the necessary paperwork and transfer the title to the land to your name. The title company will guide you through the closing process, and they should help coordinate everything for all parties involved.  Specifically, they will work with both the Seller and Buyer, and ensure documents are signed with a legal notary.

3.  What are the risks associated with buying this land?

The title company will conduct a title search to identify any potential risks associated with the land, such as liens, easements, or other encumbrances. They will also disclose any known defects in the title to you.  You can then take any defects in title back to the Seller and potentially use it to renegotiate the sales price, if there are significant findings.

4.  How long will it take to close on the land?

The closing process can take anywhere from a few weeks to a few months, depending on the location of the land and the complexity of the transaction. Now, for us, this is a massive litmus test as to whether or not we will work with a title company in the future.  If they take weeks to close, we likely will never work with them again.

5.  Are there any other fees associated with buying this land?

In addition to the cost of title insurance, there may be other fees associated with buying land, such as transfer taxes, recording fees, and attorney's fees. The title company can provide you with a breakdown of all of the fees involved.  Be sure to ask for these fees up front, even before you open escrow with them, so you aren't surprised on the closing statement at the last second.

Overall, it is important to ask these questions and get answers from a title company before you buy land. This will help you understand the risks involved and make sure you are getting a fair deal.