Selling and buying a property is a big event. It is considered the investment of a lifetime to most people. The next step in home buying is to obtain a title for the property from a Title Company. A title gives the owner right to possess the property. It is necessary that you understand the services they provide.
The role of the Title Company is as follows:
1. Receipt of the Earnest Money. To show that a buyer is serious in purchasing, he or she is asked to give the title company a deposit, this is called the earnest money. If the sale pushes through, the money is applied to the down payment, but if it will not, the amount will not be given back unless stated in the offer that it is refundable.
2. The title company will search the title of the home or property. It is a thorough check of the property’s records. It serves as a verification of the seller’s right to change ownership. This search will determine if there are any faults, demands, liens and other restrictions or privileges on the property.
3. After completing the title search, the company will now proceed to a “Commitment of Title Insurance”. This is issued to the mortgage lender and copies are provided to the seller, buyer, realtor, and lawyers. This commitment will set forth matters and exceptions that have to be satisfied prior to the settlement and the issuance of a title policy. Usually, the seller will provide at his own expense an Owner’s Title Policy the buyer, unless otherwise agreed. In most cases, the mortgage lender will require that the buyer secures a Mortgagee’s Title Policy for their benefit. Both cases provide financial protection from unknown defects, and adverse title claims or even risk to the insured.
4. Between receipt of the contract and the final settlement, the company will establish close contact with the lender, the realtor and the lawyers of both sides. This is necessary to obtain the necessary documentation for the closing.
5. When the closing date has been set, the attorney or the lender will send the legal documents such as Warranty Deed, Deed of Trust, etc. and the closing instructions to the escrow officer of the title company. The officer will then compile all the lender’s miscellaneous fees, charges, title fees and other closing costs into a final settlement statement. At this point, the buyer will be informed of the amount he or she needs to bring for the closing. When everyone is there, the fees and papers will be explained by the officer and reviewed and executed.
6. The title company assumes responsibility in collecting the necessary funds for a prompt and accurate disbursement. After the closing, the company will see to it that all legal documents have been filed for record, the mortgage lender’s requirements fulfilled and all necessary paper works returned and all outstanding liens are fully paid and the title policies prepared and sent.
7. The company plays a major role in the buying and selling process and maintains regular involvement from the time the contract is signed up to the completion of the transfer. They strive to ensure that this complex procedure is done in compliance with the instructions of the parties involved in the most effective and pleasing manner. Service is of utmost importance to a title company.