Title, Survey & Closing Process
Navigate the technical aspects of land transfer and ownership
The $150,000 Title Disaster:
Two developers buy adjacent lots for $400k each. Developer A saves $1,200 by skipping the survey and buys minimal title insurance. Developer B pays $3,500 for a full ALTA survey and enhanced title insurance. Six months later, Developer A discovers their lot is 15 feet narrower than expected due to an unrecorded easement, losing 4,500 sq ft of buildable space worth $150,000. Developer B’s survey caught a similar issue pre-closing, allowing them to negotiate a $75,000 price reduction. The difference? Understanding that title and survey work isn’t just paperwork—it’s your first line of defense against catastrophic losses.
1. Title Insurance: Your Hidden Shield Against Disaster
Title insurance protects against claims that could destroy your investment. Unlike other insurance that protects against future events, title insurance protects against past events that could surface to haunt you:
🛡️ What Title Insurance Actually Covers
Owner’s Title Policy Coverage
✅ Covered Risks:
- Forged documents: Fake deeds or releases in the chain of title
- Unknown heirs: Claims by previously unknown children or spouses
- Recording errors: Mistakes in public records affecting ownership
- Undisclosed liens: Tax liens, mechanic’s liens, judgments
- Boundary disputes: Encroachments and survey errors
- Easement issues: Unknown rights of way or utility easements
- Fraud: Previous sales conducted fraudulently
💰 Coverage Amounts:
Standard policy: Purchase price of property
Enhanced policy: Increases with property value (up to 150%)
Legal defense: Unlimited legal fees to defend title
Lender’s Title Policy (Loan Policy)
Required by lenders: Protects their mortgage interest
Coverage decreases: As loan is paid down
Doesn’t protect you: Only protects the lender’s interest
Cost: Usually paid by borrower at closing
⚠️ What Title Insurance Does NOT Cover
Standard Exceptions
- Boundary disputes discoverable by survey
- Unrecorded easements or rights
- Mechanics liens filed after policy date
- Zoning violations
- Environmental contamination
Policy-Specific Exceptions
- Items listed in Schedule B
- Matters you knew about but didn’t disclose
- Government regulations (eminent domain)
- Defects created after policy date
- Items specifically excluded by endorsement
📋 Professional Title Review Process
Title Commitment Review
Schedule A: Basic information – parties, property description, coverage amount
Schedule B-I: Requirements to clear before closing
Schedule B-II: Exceptions that will remain after closing
Key focus: Read every exception carefully – these are NOT covered
Exception Analysis
Standard exceptions: Can often be removed with survey and affidavits
Special exceptions: Specific to your property – easements, restrictions
Red flags: Liens, judgments, pending legal actions
Action: Demand removal of unacceptable exceptions before closing
Chain of Title Verification
Look for gaps: Every transfer should be properly documented
Check signatures: Ensure all parties who should sign did sign
Verify legal descriptions: Must match throughout the chain
Corporate transfers: Verify authority to sell
2. Land Surveys: See What You’re Really Buying
A survey is a precise measurement and mapping of land boundaries. The right survey can save you from costly mistakes:
🗺️ Survey Type Comparison
ALTA/NSPS Land Title Survey
Best for: Commercial properties and development
Cost: $2,000 – $10,000+
Time: 2-4 weeks
What’s Included:
- Precise boundary measurements
- All easements and encroachments
- Improvements and their relationships to boundaries
- Utilities and access points
- Zoning classification
- Flood zone determination
- Adjoining property owner information
Why choose: Most comprehensive, required by most commercial lenders, provides maximum protection
Boundary Survey
Best for: Residential properties, simple land purchases
Cost: $500 – $2,000
Time: 1-2 weeks
What’s Included:
- Property line locations
- Total acreage/square footage
- Corner monuments
- Obvious encroachments
- Basic improvements location
Why choose: Cost-effective for simple properties, sufficient for most residential deals
Topographic Survey
Best for: Development projects, grading plans
Cost: $1,000 – $5,000
Time: 1-3 weeks
What’s Included:
- Elevation contours
- Natural features (trees, water)
- Existing structures
- Drainage patterns
- Utility locations
Why choose: Essential for development planning and construction
📐 How to Read a Survey
Key Survey Elements
Property Lines
Solid lines: Definite boundaries
Dashed lines: Approximate or disputed boundaries
Measurements: Shows distance and bearing (direction)
Easements
Hatched areas: Usually indicate easement areas
Labels: Type of easement (utility, access, drainage)
Width: Critical for development planning
Encroachments
Over boundary: Neighbor’s improvement on your land
Onto neighbor: Your improvement on their land
Impact: Can affect title insurance and development
Legal Description
Metes and bounds: Uses distances and directions
Lot and block: References recorded subdivision
Must match: Title commitment exactly
3. Professional Closing Tools
Use these tools to ensure a smooth closing process:
📋 Title Review Checklist Tool
Schedule A Review
Schedule B-I Requirements
Schedule B-II Exceptions
Review Status
0 of 12 items reviewed
📅 Closing Timeline Generator
💰 Land Closing Cost Estimator
4. Navigating the Closing Process
The closing process is a carefully choreographed series of steps. Missing one can delay or derail your purchase:
🎯 The Complete Closing Timeline
Phase 1: Pre-Closing (Days 1-10)
✓ Open Escrow
Deposit earnest money, provide contract to title company
✓ Order Title & Survey
Title search begins, surveyor scheduled
✓ Apply for Financing
Submit loan application and documentation
✓ Conduct Inspections
Environmental, geotechnical, other due diligence
Phase 2: Processing (Days 10-25)
✓ Review Title Commitment
Object to unacceptable exceptions within deadline
✓ Review Survey
Verify boundaries, identify issues
✓ Finalize Loan
Appraisal, underwriting, loan approval
✓ Resolve Issues
Clear title requirements, cure defects
Phase 3: Final Week
✓ Final Walk-Through
Verify property condition, no new issues
✓ Review Closing Documents
HUD-1/Closing Disclosure, deed, loan documents
✓ Wire Funds
Confirm wiring instructions, send funds
✓ Closing Day
Sign documents, receive keys/deed
📄 Essential Closing Documents
Transfer Documents
- Deed: Transfers ownership (Grant, Warranty, or Quitclaim)
- Bill of Sale: For personal property included
- Assignment: For contracts or leases
Financial Documents
- Closing Disclosure: Final costs and credits
- Note: Your promise to repay loan
- Mortgage/Deed of Trust: Secures loan with property
Protection Documents
- Title Policy: Your ownership protection
- Survey: Property boundaries and features
- Insurance: Property and liability coverage
📝 Master the Closing Process
Closing Process Analysis Exercise (15 minutes):
Review this title commitment excerpt and identify all issues that must be resolved before closing:
🏗️ Scenario: 10-Acre Development Site
Schedule B-II Exceptions:
- Easement for public utilities over the East 15 feet
- Restrictive covenants recorded in Book 1234, Page 567, limiting use to residential only
- Possible encroachment of fence from adjoining property on North boundary
- Rights of parties in possession (current month-to-month tenant)
- Mechanic’s lien filed 03/15/2024 for $25,000 by ABC Construction
- Unrecorded easements, if any
- 2023 property taxes shown as unpaid
Complete Your Analysis:
TITLE COMMITMENT ANALYSIS:
- CRITICAL ISSUES (Must Resolve):
- Issue 1: _________________________________
- Action Required: _________________________
- Deadline: _______________________________
- Issue 2: _________________________________
- Action Required: _________________________
- Deadline: _______________________________
- ACCEPTABLE EXCEPTIONS:
- Exception 1: ____________________________
- Why Acceptable: _________________________
- REQUIRE INVESTIGATION:
- Item 1: _________________________________
- Investigation Needed: ____________________
- CLOSING REQUIREMENTS:
- 1. ______________________________________
- 2. ______________________________________
- 3. ______________________________________
- RECOMMENDATIONS:
- _________________________________________
🎯 Title & Closing Process Mastery
Title insurance protects against past defects, not future problems
Read every exception in Schedule B – these are NOT covered
ALTA surveys provide maximum protection for development
Survey reveals encroachments, easements, and boundary issues
The closing process has strict deadlines – missing one can kill the deal
✅ Title & Closing Mastery Quiz
Question 1:
What does an owner’s title insurance policy protect against?
Question 2:
Which survey type is most comprehensive for commercial development?
Question 3:
Schedule B-II in a title commitment contains:
Question 4:
What should you do if a survey reveals an encroachment?
Question 5:
The deed that provides the strongest ownership protection is:
🎯 Ready to Complete Lesson 23?
Take the quiz to finish this lesson and move closer to your Land Development Certificate.
Master the technical aspects of land transfer to protect your investments.
