Tenancy in Common Process: Title Companies and Closing Agents
Tenancy in common is now a popular method in acquiring real estate properties, whether for business or residential purposes. Tenancy in Common or TIC is the method of acquiring real estate properties with other individuals as a joint venture. The shares are not necessarily equal with the rest, but will depend on the investments of each individual for that acquisition.
The joint venture is quite appealing to business individuals due to the prospect of less risk. Since the investments, earnings, profits, and expenses are all shared by everyone; the financial burdens would be segregated as not to burden the different parties concerned.
Another factor for its popularity is due to the possibility of maximizing profits with your fixed financial budget. Acquiring multiple real estate properties with your group can increase profit, unlike purchasing a single property on your which will take up most of your budget. This way, TIC can offer a bigger possibility of profit and capital gains to be had along with your partners.
Title Companies and Closing Agents
But as with business, tenancy in common processes is quite tedious and complicated especially those who don’t know anything about it. Various professionals like title companies and closing agents can rent out their services to simplify the complex tenancy in common processes that you will have to face.
Title companies is just one of the tenancy in common process that a joint venture should inquire to get the business started. Their professional aid can handle any complex transactions for TIC without wasting time and money.
These title companies will search out facts about the property in the form of an “abstract of title”. These titles will incorporate important information such as: 1) the rightful legal owner of the property you wish to acquire; and 2) determine legal information regarding it, which includes leases, mortgage loans, and so on.
Upon completion of the abstract, the title company will now issue a “title opinion letter” to the buyer or the lender, depending on who initiated their services. Once all these tenancy in common processes are done, the closing agent will handle all the paper works and requirements to close the deal.
Closing agents will act as an intermediary between the title company and the buyer/lender, as well as the seller of the property. Signing of papers, exchanging necessary documents, payment schemes, rights, fees, and so on will be handled by them. This is usually done when the agent will issue a closing statement with the following information: 1) charges of the mortgage lender (if any), 2) charges for preparing the documents involved during the tenancy in common process, 3) fees of both the closing agent and the title company, 4) taxes, real estate or any legal fees incurred during the transactions.
One all the parties have signed and approved of all the proceedings, the title company will then follow up on the final tenancy in common process to record any legal documents at the county courthouse and return the significant documents to the parties concerned.
It is true that the advantages of TIC is quite desirable to the average entrepreneur, but with the complexity of the tenancy in common processes, the invaluable services of the title companies and closing agents are worth the additional costs.
Kathryn R. Landry is a business writer for TIC Advisors, Inc. A company that can give you the most complete information on a 1031 exchange or TIC property ownership.
Previous Posts by This Author
- Important Information on TIC: Forwarding the Subscription Packet
- The Significance of TIC: Location, Demographics, and the Building
- TIC: Tenant in Common Association (TICA) What They Can Do For You
- The Importance of Understanding TIC: Tenants
- Learning About TIC: The Non-Recourse Loan
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