Most people buy under 3 homes over the entire course of their lives. There are several professionals that are necessary for even the most typical real estate transaction, and title companies are no exception. Due to the high dollar amount of most real estate these professionals represent and protect assorted parties interests in the property.
The title company performs the necessary role of checking all aspects relating to the title of a property right from the legal ownership to title insurance. The buyer and title company have a common goal of avoiding any legal disputes which might emerge later in case the title of the property is not clear.
Any disruption in title or legal description and the title company has the responsibility to try to straighten it out and alert all parties. Any mechanics liens or tax liens have to be settled before the property can legally transfer hands.
The title company starts playing its role as soon as the sale agreement is signed between the buyer and the seller till the time that the title is transferred from the seller to the buyer. They have to ensure compliance to the necessary real estate laws and regulations of the state in which the transaction takes place. The primary role and responsibilities of a title company is covered in the sections below
Confirming the identity of the sellers
This step essentially confirms that the supposed seller actually owns the property and can legally convey it, their identity and marital state. The title company also submits all legally required documents.
Property has Clear Title
The title company also confirms that the buyer can take title in a clear manner. This confirms that all liens and encumberances have been cleared out and there are not any other remaining issues with the title.
Insuring the title of the subject property
The title company also sells the buyer a form of insurance protecting them against any future difficulty with the title called “title insurance”. This insurance policy takes care of any legal and administrative costs in settling any disputes involved in the title transfer. Both, the buyer and the lender purchase title insurance policies to protect their own interests.
The final stamp of approval is called the “Commitment of Title Insurance” and is issued only after the title company has signed off on the authenticity of the property title. All parties including realtors, lenders and seller and buyer get copies of the document for their own records.
It is in your interest to get all ownership and legal details about the property that you intend to buy. Share the responsibility with the company checking the title for your property and understand the details that they provide.
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