What Does A Title Company Do?
What Does A Title Company Do?
When you’re purchasing a new home, you’re going to wind up dealing with a number of different kinds of businesses. One of those will be a title company. In such real estate transactions, companies like these play several substantial roles in the process.
Typically, such companies will operate as agents for both the buyer and seller, any insurance company that is involved, as well as any other parties also involved in the particular transaction in question.
One good example of other involved parties in a real estate transaction would be that of mortgage lenders.
You might not understand what the purpose is behind a title company being involved in these undertakings, although you need to know that a title company serves a crucial role because they might protect you from various legal issues you don’t even know about.
Other Things A Title Company Does?
-They perform a title search looking into the legitimacy of a property deed.
-They act as an escrow agent, where they hold deposits and any other payments up until the point the transaction is finalized.
-The title company issues title insurance for both lender and buyer to give them protection against any issues or claims with the property.
-Title companies order the property survey.
-They act as a closing agent, as the final closing of a home is usually held at the title company office.
-They conduct a title search, as this is among the more important duties this company does. Title searching empowers a buyer to get information about the history of the specific home you’re looking to buy.
This particular information generally explains what previous buyers and sellers there have been for that property, as well as the dates these transactions were carried out on.
A title search also ensures there aren’t outstanding issues with a property, like the following:
-Any HELOC loans or second mortgages still open
-Demands, judgments, or special assessements
-HOA fees still unpaid
-Unpaid tax liens
-Any other legal issues that might be specific to that area
Once the title search is complete, the title company will generate a comprehensive report based on their findings and the information they discover.
In the process of buying a home, that report is quite significant given how it will entail any issues that might stall the home sale.
What the title search uncovers will be used in coming up with the abstract of the title.
Finally, the title company will issue a legal document known as the title opinion letter which indicates the title validity.
Title Companies Also Play The Role Of Escrow Officers
Title companies act as the escrow officers as they hold both money and documents as per the instructions of any involved parties.
This is further explained in the example of a seller surrendering a signed deed over to the company, whereas the buyer gives their money to the same company.
As practicing professionals serving a role, a title company will only release the signed property deed and money, as they are instructed by both the seller and buyer and have specified in written form.
The Title Company Makes Sure The Seller Is Actually Legitimate And Possesses The Maximum Rights For Selling The Property
Title companies have an obligation to conduct a wide variety of research on a property’s history.
This is primarily done to let the company verify that a seller is a legitimate owner who has maximum rights for selling the specific property involved.
In order to avoid cases where an original property owner might have died and a descendant might want to sell that property without siblings being involved, title companies need to look into numerous issues to determine things.
Hidden issues that might be revealed with a complete title search can include heirs previously undisclosed, wills that were forgotten, deeds with defects, land mineral rights that were previously unknown, and invalidated court proceedings.
-They issue title insurance to the buyer.
Once the title validity is established, then the involved company will issue a title insurance. Title insurance will protect the new owner from issues that might come up from disputes from previous ownership, as well as other issues.
The benefit involved with this type of insurance policy is that a buyer will pay a single premium, based on the property value, which is different than other insurances that involve annual premiums.
In this particular case, the insurances that are involved are the lender’s and owner’s title insurances which respectively protect the mortgage company and property owner.
-They order a survey of the property.
Most lenders definitively request a property location map. The title company would then order a survey to be conducted with the buyer’s consent.
Once the survey gets finished, the title company reviews it to make sure that there are no issues present or that might arise during closing or later. If any issues are detected, then the buyer and lender are both notified.
The survey is handed to the new buyer on the settlement date.
-The title company serves as the closing agent.
Title companies often serve as the closing agents in all transactions that are involved with the process of buying a home.
This simply means that this business will act as an agent for both buyer and seller through the transactions.
As they are a closing agent, they will both receive and surrender all sort of payments that relate to the transactions, while also obtaining any necessary signatures for all involved documents.
Once the documents are signed, any documents that need to get recorded, such as the deeds and mortgages, get recorded by the business appropriately with the land records office.
The services listed above are a handful of the significant ones that a title company provides its clients.
The many services they provide can prove quite helpful if you’re looking to buy a home. A reliable title company can help you get through this long process.