What Exactly Does A Title Company Do?

You do not generally buy more than a single property in your lifetime. It is a high value transaction involving legal risks. Besides using a professional home inspector for pre-inspection of the home, the buyer has to rely on a number of other professionals such as real estate attorney and a title company.

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.

The title company makes sure any and all liens, including mechanics liens and tax liens, are taken care of before the transfer. They also confirm legal boundaries just in case there may be a discrepancy.

As soon as both parties sign the purchase and sales agreement, the file is sent to the title company who immediately start working. They assess the compliance with all local and federal laws and regulations and take care of the following:

Verification of the seller

The confirmation of the seller’s identity and their legal ability to transfer the property is verified at this point by the title company. Then they submit all necessary legal paperwork as well at the appropriate time.

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 encumbrances have been cleared out and there are not any other remaining issues with the title.

Insuring the title of the subject property

In many instances, the title company also organizes for title insurance to the buyer against any legal risks that might surface in the future. This would insure the buyer against any ownership issue emerging in future and costs involved in litigation and other matters related to settling any dispute regarding the sale being made by the actual owner of the property. Though the buyer has the right to choose his title insurer, the buyer usually prefers the same company with whom the lender takes tile insurance cover.

When a title company is satisfied with respect to title of the property, they issue a document called as the “Commitment of Title Insurance” to the mortgage lender along with a copy to the other parties involved in the deal i.e. the buyer, seller, Realtor and the real estate attorney. As a buyer it is essential that you understand the role and responsibility of the title company.

Your responsibility to investigate the property you are interested in does not stop at trusting the professionals you hire to take of things. You must also act to disseminate the liability of the transaction through as many responsible entities as necessary for your own protection.

Gavin King is the Designated Broker of Realty In Idaho and enjoys writing articles on boise idaho homes and homes for sale in north nampa idaho