12A — November 22 - December 5, 2013 — The Road to Recovery — Mid Atlantic Real Estate Journal
www.marejournal.com
T itle I nsurance
By Allen Meccia, Jr., First Bergen Title Agency, LLC Title Insurance: A means to mitigating real estate transaction risks
T
itle insurance is a ne- cessity in today’s real estate marketplace
tion (ALTA), about 25 percent of all transactions reveal a critical title matter that, if uncorrected before closing, will impact both the seller’s and the buyer’s finances and/ or use of the property. Although today’s trans- actions are more complex than ever before, there are certain risks that should be mitigated through third- party insurance policies. Title insurance protects owners against historical claims on their property. Additionally, it helps all parties involved in a transaction determine
their rights and assures that land transfer is expeditious and secure. In res ident ial , of f i ce , multi-family and industrial transactions, title insurance protects the purchaser and lender against more than 100 types of claims. These include fraud, forged signa- tures on deeds, unknown heirs, liens, survey issues and documentation errors. Historically, the title insur- ance industry has been a good barometer of the country’s overall economic climate. In the late-2000s, as the real
estate industry struggled to recuperate from the recession and the effects of the sub- prime mortgage meltdown, demand for title insurance slowed. In 2012, mortgage interest rates dropped to historic lows, which bolstered the real estate industry and, in turn, the title insurance business. ALTA reported a 20.6 per- cent rise in title insurance premium volume during the second quarter of 2013 as compared to the same period last year. According toALTA’s 2013 Second-Quar-
ter Market Share Analysis, the title insurance industry generated $3.3 billion in title insurance premiums during the Q2 of 2013 compared to $2.7 billion during the Q2 of 2012. This trend is reflected in First Bergen Title Agency’s current transaction pace. The Hackensack, N.J.-based company, which has been providing title insurance protection and settlement services for homebuyers, real estate professionals, attor- neys, lenders, homebuilders and developers for more than 50 years, is on pace to record its highest Q4 transaction velocity in years. The title industry will con- tinue to rebound with broad recovery in most markets. Given the size and complex- ity of commercial real estate transactions, it is vital to be aware of the various “moving parts” involved with closing a deal to avoid costly holdups or problems after closing. In commercial transactions, title insurance professionals work closely with their at- torney, clients and surveyors to locate any undisclosed but recorded easements benefit- ing neighboring land, as well as subdivision and zoning is- sues. This can involve access, utilities, drainage, airspace, sight and other types of ease- ments, as well as many types of liens. The importance of title insurance as part of a com- mercial property purchase or loan is so the insured can look to another party – the title insurer – to compensate for any losses. Commercial transactions often are ex- tremely complex. Title pro- fessionals have to consider the unique circumstances of each transaction to produce the best outcome for all par- ties involved. Working with a reputable title insurance company that routinely closes large and intricate residential and commercial deals is one of the best means to ensure success for small, traditional transactions to larger, multi- faceted property trades. It also offers peace of mind, particularly in today’s ever- changing market. Allen Meccia, Jr. is a managingmember of First Bergen Title Agency LLC in Hackensack, NJ. n
and for good reason – it c a n me a n the di f fer- encebetween c l o s i ng o r abandoning a deal. Seri- ous title is- sues are not
Allen Meccia, Jr.
only expensive, they are more common than even the most seasoned property owners might think. According to The American Land TitleAssocia-
Where every Closing Counts
• Providing title insurance protection and settlement services • Specializing in residential, commercial and industrial properties • Single-source solution for real estate purchases, refinances and leasehold transactions • Designated qualified intermediary for 1031 exchange transactions through First Bergen Deferred Exchange LLC • Affiliated underwriters include Chicago Title Insurance Company and Commonwealth Land Title Insurance Company, members of the Fidelity National Financial family of title companies, as well as Old Republic National Title Insurance Company
Court Plaza North, 25 Main Street, 2nd Floor, Hackensack NJ 07602 201-343-3121 www.firstbergentitle.com
Made with FlippingBook - Online Brochure Maker