What is the title company’s role?

What is a title? Lot of home owners get confused with a lot of jargon that goes around during a real estate transaction. Title deed refers to the document which confirms the ownership of a property as against a certain individual or company. It has all physical aspects related to the property as well as the ownership details, whether it is a single ownership or joint ownership, and types of holding in the same.

A company which does research into the claim of a property is called a Title Company. These sorts of firms specialize in examining the deeds for any issues related to the ownership of the property, as and when the same is put up for sale. They examine whether the ownership is devoid of any litigations and if any other financial issues are connected to the property, so that the impending buyer is saved of any hassles after the purchase.

As they are quite important to the entire process, they become an inevitable part of the real estate deal. They are involved from the first to last step of the entire transaction.

The steps that these companies follow are:

As soon as a sales contract is signed, the company accepts specified amounts from both parties, to be included as part of closing costs, and places this in an escrow account, to be monitored by an Escrow officer, appointed by the title company. After this, the company goes into researching of the title deed. It checks all details, including mortgage issues and any government or legal restrictions on the property. After an all clear is received from the company, only then shall further proceedings continue. The next step would include a commitment of insurance, which is in written form, and related payments are made. As per agreement, home warranty is also purchased.

As the final settlement approaches, the company gets ready with all relevant documents and statements. The closing agent or attorney informs the escrow officer about the closing date and on this date, the escrow officer produces a statement which has all expenses listed, from either side. Any additional amount is transferred back to the original party’s account. The statement is scrutinized and if found to correct, the deal is considered to be closed. It is the escrow officer’s responsibility to make sure all payments related to closing are done.

Hence, the title company’s role is very important for a legalized closing of the deal and cannot be ignored at any costs. The buyer can choose his own title company to perform these duties, and so, it is important that the buyer has an idea about the competency level of the title company that he has chosen, so that no information is withheld and he gets all related data before he proceeds.

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