A property transaction involves large paper work related to completion of legal formalities. The transaction involves legal risks and hence you must approach the real estate deal by utilizing the services of professional firms like Title Company. The role of a title company is immense and critical to ensure that you don’t end up facing legal proceedings once you have completed the transaction. The title company performs due diligence of ensuring that the title of the property that you are buying is absolutely clear. The title company has the prime responsibility of providing the buyer of the property peace of mind and comfort that the property being purchased has no legal risks in terms of the ownership of the property.

Genuineness of the ownership of the seller

The first and foremost task of the title company is to verify the genuineness of the seller. In other words they ensure that property is being purchased from the legal owner of the house. This process would require checking and verifying the seller as per the records held by the respective state governments. The title company gets into detailed scrutiny of public land records to ensure that there is no fraudulent seller who is trying to sell a property that he actually does not own.

Property has Clear title

Once the title company has verified the legal owner, they have to ensure that the title of the property is clear which essentially means that there is no lien marked against the property. In other words the property has not been hypothecated to any third party. They would also ensure that the necessary property taxes and all other costs towards maintenance have been paid and there is nothing that the seller owes to any one in respect of the property being proposed to sell.

Organize for title insurance

The title company is also responsible for organizing title insurance for the buyer. This essentially protects the buyer from any litigation and costs associated to any proceedings that are filed against him at a later stage questioning the authenticity of the sale transaction and the legal standing of his ownership. The buyer is free to choose the title insurer  but most of the times the buyer ends up taking it from the same agency which the lender utilizes to cover their risk.

Upon the completion of all its responsibilities and satisfied with its due diligence, a document known as the “Commitment of Title Insurance” is issued by the title company to the mortgage lender with a copy being provided to each of the buyer and the seller. Besides being absolutely aware of the real estate rules and regulations of the state, the buyer has to be cognizant of the roles and responsibility of the title company.

It is the title company which provides you necessary safeguard against any other claimant of the property which you have purchased. Do not worry about the fee charged by these companies which is negligible compared to the comfort level and assurance provided by these companies.

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