The 3 Roles of Title Companies

  • Posted by Jordan Blakley
  • 04/05/2013
  • title
The 3 Roles of Title Companies

Buying and selling real estate can be a rather complicated affair. There are numerous agreements to be signed, documents to be exchanged, and monies to be disbursed. Fortunately, you don't have to go it alone! There is help available through your local title company – an organization that ensures all buyer paperwork and funds will be in order and ready to distribute prior to closing.

To help give you a better sense of the full scope of title company capabilities, here is a quick list of their typical responsibilities:

Title Searches

One of the most important roles of a title company is to perform a title search. This process will provide insight into a home's owner history – who bought the property, who sold the property and when the transactions occurred. It will also determine if there are any demands, liens, or other restrictions on the property. Lenders will not issue a mortgage without a title search.

Once the review has been completed, the title company will then produce a report of search findings. This title report will list any concerns or problem areas that could potentially stall the sale of the home or cause future fraudulent ownership claims.

Insurance Issuer

Another important role of the title company is to issue title insurance. Although a title search is conducted prior to settlement, it is practically impossible to ensure a title is clear of all hidden defects, resulting from undisclosed heirs, forgotten wills, invalid court proceedings, or defective deeds.

Title insurance policies, therefore, guarantee the title as reported and recorded. These policies protect a buyer from fraudulent ownership claims and promises relief for the buyer, should any unforeseen defects arise during homeownership.

Closing Agents and Escrow Officers

A title company may also serve as a closing agent and/or escrow officer during settlement. In this case, your title company will act as a mediator between the selling and the buying party, ensuring that all necessary documentation is signed and recorded. The title company will also oversee that all funds, including closing costs and down payments, will be paid and properly disbursed.

In Summary

Closing can feel like a whirlwind. But with the help of a title company, you can avoid much of the settlement stress. To find a local title company in your area, contact your real estate professional today.