Non-residential files can sometimes seem intimidating. However, these are excellent sources of revenue and future lines of business.
There are, generally, three non-residential file types: Agricultural, Commercial, and Construction. Here are tips on how to work these files. Be sure to reach out to your ATGF representative for help at any time, and if a file seems too intimidating, call ATGF to see if we can assist or help you find an ATGF agent referral that may be a good working fit for you or your company.
Agricultural files are probably the easiest of the three. However, agents must be aware the land may have been closely held for decades by one or two families. As such, it is imperative to obtain thorough title searches and review any probate, trust, or dissolution of marriages that show in the title chain closely. Additionally, because these parcels of land tend to be broken up and quite large, a plat drawing or survey may not be easy to obtain. In those cases, a good GIS map with aerial pictography, should be examined for water issues, encroachments, driveways or other roads, and access.
Commercial files (not including agricultural) require good communication. In these matters, it is possible to transfer more than real estate. Ask good questions about the nature of the estate and transaction scope. Are there endorsements the buyer or the bank will want on the policy? Make sure to ask for a master list as early as possible. There may be tenants or other parties interested in the land; identify these interests in the commitment (the most common being the Rights of Tenants in Unrecorded Leases, if any). Finally, there may be multiple parties represented by legal counsel. It is prudent to find all the groups as soon as possible, ask lots of questions, and don’t be afraid to charge for your time in satisfying their requests (many endorsements may have labor-intensive requirements, and that work should not be free).
Construction Files appear daunting. There are priority issues, draw requests, working with suppliers and laborers, and lots of record keeping. The key is to be in charge of the file early to set expectations on how you will be treated, and how you will treat the file. Make sure to get a “Disbursement Agreement” in place, even if it is simple, so it is clear how disbursing of funds will work. Understand the priority laws of your jurisdiction and make sure the lender, borrower/builder, and contractor are all aware of their duties under those laws. After that, the files require good bookkeeping skills, attention to detail, and routine monitoring. Again, those services should not be complimentary.
All of these files require more work than a traditional residential transaction. However, the rewards are more than worth it. These files are large, meaning you can charge higher premiums. Also, the opportunity to build goodwill with all parties will help secure your next file.
As always, you are not in this alone. ATGF wants to help you and your company succeed. Make sure to reach out to your ATGF representative with questions or requests for assistance, or request an agency application to start working with a company that cares.
Founded in 1960, ATGF provides best in class title insurance underwriting and services for more than 60 years. The company's mission is helping agents succeed through trusted products and services, innovative technology and amazing support. The company currently pursues this mission by underwriting, training and supporting agents in Colorado, Utah, Minnesota, North Dakota, Nevada, and Arizona. ATGF has maintained a strong Financial Stability Rating(r) (FSR) of A, Exceptional, from the independent rating agency, Demotech, Inc.