If you are purchasing a property that is newly constructed. You need to keep the following things in mind on those transactions:
• Mechanic’s Lien issues are the #1 title insurance claim in the state of Missouri- be sure you are receiving mechanic’s lien coverage on their owner’s policy of title insurance.
• If the builder is selling a spec home- the title company will consider it to be new construction.
• The title company will need to know if the builder disbursed his funds on the project through the bank, through a disbursing company/title company or if they self-disbursed.
• If the builder self-disbursed, have the title company first check to see if the builder is on their underwriter’s approved list.
• If the builder is not on the approved list, they will need to get a Certificate of Disbursement from the bank or title company that disbursed the funds.
• If the builder self-disbursed AND they are not on any approved list, the title company will need to review the appropriate documentation from the project (i.e. cost breakdown, all invoices, and lien waivers from all contractors and suppliers). Please note: There may be a fee for this service.
• Be sure to let your title company know that the property is newly constructed early in the process so that all parties have enough time to get the appropriate documentation together.
• Many builders will supply their buyers with a survey. If this is the case, be sure to find out what type of survey the buyer will receive and whether or not there is any charge associated with it.
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