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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Title Company In Real Estate
When you are in the process of buying or selling a real estate property you might have multiple contact points at every step of the process.
From your real estate agent to the closing agent, all point of contact has their significance in the home buying process.
In this post, we will understand the roles and responsibilities of one of the most important teams that help you behind the curtains in your buying process, ‘Title Company’.
What Is A Title Company?
A title company is a neutral party that has many responsibilities during a real estate sales transaction.
The title company enters the process once the buyer and the seller sign the sales contract.
It holds the earnest money deposit in escrow that the buyer makes after signing the sales contract.
It also conducts the title search to ensure the property title is clear and there are no claims, liens, or any other issues with the ownership of the property and help the buyer and the seller at the time of closing.
What Does A Title Company Do?
A title company has 3 key responsibilities.
I - Title Search:
A title company would be responsible to do a title search on the property in question.
This will help the buyer and the seller know if there are any existing and hidden liens or claims against the property or anything that challenges your right to own the property.
In this process, the assigned company will go through public records to verify the seller’s ownership and determine if any issues could impact the buyer’s ownership in the future.
The title agent or the escrow officer will conduct a thorough search through county records and other sources to ensure that the seller has the right to sell the property.
The report provided by the title officer will include the chain of ownership, pending claims, liens against property, judgments, surveys, encumbrances, easements, etc. so that all the issues are cleared before the property is transferred to the buyer.
II - Title Insurance:
They will also provide a title insurance policy to protect the buyer’s ownership rights.
Just like you need insurance for your car or home for the future, title insurance will protect you from the past.
If there are any claims or liens that were missed during the title search, your title insurance will cover the same.
This is a one-time premium that the buyer pays at the time of closing along with other closing costs. This will protect your ownership of the property for the length of time you own the property.
III - Escrow and Closing:
Once the sales contract is signed, the title company will hold the earnest money deposit paid by the buyer in an escrow account till the closing.
Before closing the title company will gather all the documents in form of a package from the lender also known as closing disclosures.
Once the package is received from the lender, they will make sure all the numbers on the packages are matched with their numbers.
At the closing, they will produce the final package for you and the seller to sign in presence of a notary and ensure that the money is collected from the buyer to pay off the vendors.
Finally, they will ensure that the signed copy of this package is sent to the lender and buyer.
Conclusion
Title companies play a very crucial role in the home buying process. They make sure that the title of the home is clear for transfer, maintain an escrow account till closing, and help in closing the transaction.
You as a buyer have an option to choose your title company for your real estate transaction.
You have to make sure that you have a good and reputable title company for your real estate transaction for a smooth process.
