A real estate title company is an integral part of any real estate transaction. A title company acts as a combined agent for the insurance company, the buyer, the seller, and anyone else involved in the real estate transaction, like lenders or asset managers.
The title company will be involved throughout the majority of the real estate transaction.
As an attorney-owned real estate company we work with clients in a wide range of capacities. We represent buyers, realtors, lenders and asset managers in real estate closings.
A title company’s first job is to ensure that a property’s title is clean. This involves meticulously searching through property records to ensure that there are no existing judgments or liens on a property. In case there are any existing liens or judgments, the title company ensures that they are paid off at, or prior to closing.
Although a thorough title search is essential, there are certain matters, such as a forged document, that can’t be detected. Even if there is an outstanding claim that does not threaten a loss of title, the legal expense to defend against such a claim can be prohibitive. This is why title insurance is so important to have. You pay for it once and it protects you for as long as you own the property. The peace of mind an owner acquires with the title insurance policy is truly priceless!
A title company will receive the final version of the contract, receipt it as the final version, and accept all amendments. It assembles all the pieces of the transaction as they come together – from loan specifics to mortgage payoff information to home warranties and surveys.
When closing instructions from the lender arrive, it is up to the title company to assemble all parts and put together packages for each party. From homeowner’s association covenants to child support liens to tax statements and bank routing information – it all has to pass through the title company.
Collecting earnest money and holding it in an escrow account is one of the biggest functions of a title company. Title companies cannot release this money without first having all parties, sign an agreed upon closing statement. The closing statement will reflect each and every expense, fee, and proration involved in the transaction. Every penny is strictly accounted for.
Once the sale closes, the title company will disburse the closing funds as detailed in the closing statement. Not only does the title company pay the seller the net proceeds of the sale, the title company will also pay the recording fees and real estate commissions, pay off past due taxes, and existing mortgages, liens and all other expenses of the transaction.
A title company remains a neutral third party and serves simply as an information processing hub. It does not represent one party more than the other but rather simply processes documents as set out by the contract as well as by other parties.
A title company assembles loan documents and closing instructions from the lender, but it will never dictate terms or make the rules. Sometimes, this can be a refreshing break and an additional set of eyes of a real estate transaction ensures that all comply.
Real Estate Closings
A title company is responsible for closing most real estate transactions. The closing is typically done at the offices of the title company. During closing all the relevant documents must be assembled and the title company must meet with the buyer and seller to get those documents signed and notarized.
Experienced title companies have gone through hundreds if not thousands of such closing sessions and can explain everything required clearly to all parties involved. It is common for buyers and sellers to sign separately and in many cases, it is even possible to arrange for closing by mobile notary or “mail-away: if one of the parties is unavailable to close at the offices of the title company. The title company helps arrange all this as well.
Title companies use various approaches to satisfy the needs of their customers, but what stays the same is the critical role they play in ensuring that real estate purchases close properly and safely.
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