One might assume that once a home has gone into contract that the rest is a cake walk. That is not always the case. Sure, title insurance provides protection for the buyer from title problems and helps uncover defects that may become known after the closing. But title problems are more common than you think, and Christopher Nuzzi explained how to make that Hamptons dream home a reality without the headaches.
Advantage Title is headquartered in Melville with offices also in New York City, Riverhead, and now East Hampton. Is the methodology for title insurance for these areas different in terms of what is required for the title?
While the methodology may be the same in all the regions we serve, understanding the geographic differences, local customs, and the nuances of how to close a transaction in an area like the Hamptons, the North Fork, and Shelter Island, is an integral part of our success.
Having a dedicated team of examiners who work in the county center, and five in-house counsel, makes the process seamless for our clients because we are focused on maintaining a local team of resources that understands how to close a transaction in this region.
The firm offers services to both commercial and residential clients. What are we looking for in the title for commercial properties?
The same general principles apply to the search and examination of commercial and residential property. However, the transactional level of complexity can vary considerably from residential to commercial property. For example, in commercial transactions, we may insure the acquisition of ownership interests in the property-owning entity which rarely occurs in residential transactions.
Advantage excels in both, providing expertise on the East End insuring all kinds of transactions, whether residential or commercial properties such as vineyards, farms, marinas, hotels, and hospitals, to name just a few. Aside from our work on the East End, Advantage also handles many very significant commercial transactions throughout Long Island, NYC, and nationally.
And for residential?
The details of a transaction differ depending on where the transaction takes place. For instance, residential transactions in Manhattan are entirely different than those on the East End. Out east, we find that surveys and survey readings become especially important, in particular as to how it relates to encroachments and areas that may be out of possession.
Restrictive covenants that limit the potential use of a property and things like easements to the water, or driveway easements, are also important items that can affect marketability.
What is the most important thing to look for in a residential property?
From a title perspective, breaks in ownership, outstanding liens and judgments, restrictive covenants, and severe encroachments are all vital. Hiring great local counsel and real estate agents who are familiar with this area and understand the unique qualities that make it so desirable goes a long way toward ensuring a successful outcome.
What is the title company’s liability if something is missed?
Liability and the value of the policy equates to the value of the purchase. As title insurance rates are regulated by New York State, it is the expertise and service provided by the title company that is the differentiating factor. This speaks to the importance of company depth and experience.
Advantage has been in business for over 30 years, and we’ve been fortunate to have many of our employees with us for 20 years or more. That continuity has enabled us to grow with our clients and with the regions we serve. It is crucial to have experienced examiners who understand the importance of accurate research and of searching back beyond the industry norm of 40 years.
Especially in areas of such high cost, restrictive covenants can affect marketability and value, outstanding liens can be significant, and knowing how to deal with encroachments and areas that could be out of possession becomes crucial in limiting any potential loss to our clients as well as any claim of the underwriter.
A significant part of my role is to be hands-on with regards to dealing directly with our clients. From working with the team of examiners to doing property inspections personally, we work together to minimize any potential risk.
Do you work a lot with the mortgage lenders or homeowners or both?
We work with attorneys, buyers, developers, borrowers, lenders, and real estate agents all in various capacities.
What are good questions that a home shopper should be asking?
This is where we are fortunate to have so many talented local real estate agents who not only know how to find the right home for someone but who also understand how to ensure that the property is free from any potential problems.
Local real estate agents are an integral part of a transaction and we work closely with them to identify potential issues up front, oftentimes before even listing a property, with the intent of solving them before they become obstacles to a closing. The same goes for the many attorneys, surveyors, appraisers, and other land use professionals who work hand in hand with all involved to get a deal to close.
Knowing about that easement to the water, whether or not the dock has appropriate permits, if that adjacent parcel of open space will remain as open space, or if there are any restrictive covenants limiting buildout of a property is vitally important in this highly valued market. Having a good working knowledge of the local zoning codes and regulatory processes has also given me the ability to assist potential buyers and their representatives with many of these questions.
Is the sale of the property usually contingent on the title results?
Oftentimes, yes. It’s the title report that shows legal ownership and any breaks in the chain, or uncovers judgments of any sort against the property owner. This is where working closely with attorneys and real estate agents early on in the process is important, in an effort to identify any potential obstacles to closing and address them as early as possible.
Advantage Title has been a leader in the community. What is it about the East End that brought the company out here, besides the glorious homes?
We’ve been here for many years and are proud to further invest in not only our own business growth, but most importantly, in the communities that we work in. I’m a lifelong resident and Joe Willen, the president and CEO of Advantage, spends a lot of time out east as he’s an avid boater, usually keeping his boat in Montauk for long stretches and visiting all the great spots we have here on the North and South forks.
Additionally, Advantage’s personal, hands-on service model fits well with the clientele on the East End. Our office expansion into East Hampton was a natural extension of our commitment to this area.
How did you personally get involved with Advantage Title?
A mutual friend. I had worked in the title industry for quite a few years and was looking for a top company with depth that also understood the nuanced real estate practices on the East End, which are at times very different than other areas. Advantage’s base in Riverhead in proximity to the County Center (where the bulk of the title report comes from) and their client-based focus on service is what drives the company, and I was proud to offer my insights and experience. Together we have grown extensively and are very excited about our expansion with our new East Hampton office.
What do you, personally, do for fun when you’re not leading the East End in title insurance?
I grew up out here and consider myself really fortunate to have been given the opportunity to experience all that this area has to offer. I love going boating and fishing with my family, hanging out at the beach, and the ability for my wife Sandy and I to share with our own children year-round just how special this place is.
To learn more about Advantage Title services, call 631-591-2267.