What Does a Title Company Do?
There are multiple steps that must be taken when purchasing a home. When considering purchasing a home, you will need to contact a mortgage lender like us at Hall Financial and a real estate agent. The title company is another important piece of the homebuying process!
Title is a document you receive when you purchase a house providing the buyer with ownership and rights over the property. This is often confused with a warranty deed, which is the official legal document transferring ownership of the property. Title is a concept, whereas a deed is a physical document.
A title company performs in many different capacities. These include the initial title search, property survey, title commitment, title insurance and coordinating and conducting the closing just to name a few. We’ll give a brief overview of each of these functions below.
Title Search
A title search is the most important task that title companies carry out. A title search involves verifying the ownership of a property by checking public records and confirming legal ownership. It also searches for any and all liens associated with property. If someone was selling a home they owned jointly with another party, then all titled owners must sign in order to transfer the title to the new owner(s). Essentially, the title search process checks the history of ownership, liens and verifies who has the right to transfer ownership of the property.
Property Survey
A property survey involves a surveyor going out to the property and checking the boundaries and dimensions of the land. This survey is not always required but is a good idea to have one performed to make sure that you know exactly what land is yours. This can help you avoid encroachments or other future property disputes with neighbors.
Title Insurance
There are two types of title insurance which can be issued. The Owner’s title insurance policy protects the buyer for any financial or legal costs arising from any lawsuits from past owner’s of the house. The Mortgage Title Policy is issued to protect the lender and the buyer the current mortgage liens is valid and there are no other possible lien holders.
Disbursement
Title companies ensure all monies associated with the closing of the home are disbursed in a timely and proper manner to lenders, sellers, taxing authorities and any other associated entities related to the closing.
Closing
Lastly, title companies conduct closings on home purchases. They may assist with any details in closing such as adding a cosigner and finalizing the deed and title transfer.
Title companies are an essential part of the homebuying process. Whether you’re a first-time home buyer or you’ve purchased homes in the past, understanding the role of title companies and the services they offer will help you avoid any confusion about their critical involvement in the home buying process.
For more information, chat with us at callhallfirst.com or give us a call at 866-Call-Hall.
