What Does a Title Company Do for a Buyer?
So, you’re wading into the market and trying to get a handle on the major players in the real estate process. Maybe you’re already somewhat familiar with the mortgage lender and the real estate agent. But, you may be less familiar with the title company – an equally important contributor to the transaction.
The 3 Main Responsibilities of a Title Company
The title company has three primary responsibilities to the buyer:
- Investigating any potential obstacles to your secure ownership of the property
- Providing insurance policies to protect your interests if there are complications
- Managing closing details and escrow
Title Search
Title companies use their expertise to investigate the ownership history of the property. They confirm the current owners don’t have any outstanding financial issues that could impact your taking ownership.
Because there are sometimes complications related to unclear inheritance or divorce decrees, it’s critical all parties know for sure the owner has the right to sell.
The title investigator also looks for signs of fraud in the form of falsified records, questionable property transfers, and forged signatures.
In addition to confirming the property has the legitimate legal status presented, this search also turns up limitations on future developments due to the rules of a local authority like a homeowner’s association.
What’s the Role of the House Title?
The house title represents the legal rights you have to a house and its associated property.
These are as far-ranging as development rights, the right of sale, and even things like mineral and resource rights.
This title isn’t to be confused with the deed, which is the actual binding document used in the transfer of property.
Insurance on Your Title
Most likely, when you acquire a mortgage you’ll also need title insurance. It serves to protect the interest of the lender and the buyer.
The lender’s insurance policy protects the lending institution in the event complications arise with the title after the transaction occurs. Lender’s insurance is a one-time purchase that provides coverage until the house is paid off and the lending institution no longer has a stake in the property.
Like lender’s insurance, the buyer’s insurance is also a one-time purchase, but its coverage lasts for as long as the buyer has ownership of the property.
Closing and Escrow
As part of the closing process, you can expect your title company to employ a signing agent to review all transactional documents and finalize the property transfer. This is an important and meticulous process, so be sure your closing is handled by an experienced and professional title company like Clarion Title.
Title companies also hold money in escrow, which is a type of third-party account that disburses under particular conditions. There are a number of reasons a home buying transaction would utilize escrow accounts. They mostly function to increase trust in the transaction and reduce the chances of fraud.
Choose Clarion Title for Your Title Needs
If you’re looking to buy a home, you’re going to need an experienced title company on your side. Consider Clarion Title as your first choice. We’ll get you in your home as quickly and financially sound as possible.
This material is provided as a courtesy and for educational purposes only. Please consult your title professional for specific information regarding your situation.