Six Things to Consider When Choosing a Title Company for a Religious Real Estate Transaction

A good title company can be the difference between your ideal church location and your not-so-ideal second or third choice. Your real estate broker has found you the perfect property and your offer has been accepted. Now what? Choosing a title company is an important but often overlooked step. Your title company should have the true legal knowledge, technology, and staff to facilitate a smooth transaction and avoid future setbacks. Here are five key considerations:

1. Professional Recommendations – Your real estate broker deals with title companies for each and every transaction. Which firm do they recommend? Why? Agents typically have three to four potential companies for you to choose from. They know which firms consistently provide reliable and accurate results.

2. Specialty – Many title companies assist with residential transactions, not necessarily commercial real estate properties, let alone churches. Many of the metrics are the same, but the research and background information that a title company needs to seek out can vary from property to property. Find a firm that has experience with complex commercial real estate transactions to ensure a smooth closing.

3. Communication – Effective and thorough communication is the most important step to successful closings. Are you comfortable talking with the title company? You may not want to hear from your title company, but if issues arise you need a company that will be upfront, honest and timely. Open communication and professional response time is key.

4. Price – It is worth your time to get multiple quotes from potential title companies. Ask for their fee sheets and compare costs. In addition to trusting your broker and title agent, you need to go into the closing with as much knowledge as possible. Costs can add up quickly in complex transactions, do your homework and be aware of the potential fees.

5. Location – Although it is possible to complete a real estate transaction digitally, it is much easier and more common to sign legal documents in person. Pick a title company with an office that is central to your location or with an agent that is willing to travel.

6. Real Estate Transfer Taxes – Churches are exempt from real estate transfer taxes and many title companies are not aware of this item. In Michigan, a county assessment of .11 percent is levied on church sales. Although this may look as a tax (state transfer taxes are .75 percent), the county portion is viewed as an assessment and thus must be paid. Application of real estate taxes will vary from state to state, community to community.

How do you know if you made the right choice? If your title company worked diligently and quietly in the background, your decision was sound. Be sure to recommend the firm to others if they seemed invisible and your closing went smoothly.