Title companies play an important role in real estate and mortgage loan proceedings. When property sellers and buyers enter a formal purchase agreement, title companies act as a third party to ensure everything goes smoothly and that everyone involved is legally protected.
Many title companies also maintain escrow accounts during the proceedings, containing all of the funds necessary to close on a house, to be sure that the money is set aside and used only for settlement expenses. A settlement agent from a title company then brings all necessary documentation, explains it to the other parties, collects any additional closing costs and supervises events on the day of sale.
A title company is responsible for helping property sellers and prospective buyers by confirming a sale is legitimate and ownership is properly transferred. This is done by performing a title search, an extensive review of property records to verify that the person or company claiming to own the property is the sole legal owner. The title company will also look for outstanding mortgages or any other hidden fees that may complicate things for the buyer.
Title companies may also require a property survey be done to determine the exact boundaries of the plot of land that the house sits on.
Before moving forward the company prepares a short summary of what they found, called an abstract of title, and then issues a legal document that speaks to the validity of the title.
Once a title’s validity is confirmed the title company can issue a title insurance policy, designed to protect lenders and owners against fees resulting from ownership disputes that may occur. There are two major varieties. Owner’s title insurance protects the property owner from title issues while lender’s title insurance protects the mortgage company. Homebuyers must pay for lender’s insurance when closing on the house. Either the buyer or seller may be required to pay for the owner’s policy, depending on where in the country the sale takes place.
If you’re in need of a title company or would like more information about mortgage services, contact Eastern Title and Settlement. Our goal is to ensure your experience is enjoyable from start to finish. Whether you are buying, selling or refinancing residential or commercial real estate, we are dedicated to providing the best and most comprehensive service with competitive pricing.