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Title Companies

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Exactly What are Title Companies?

When wanting to understand what are title companies, it is important to note that the professional services they provide are necessary to handle the complex transaction of purchasing a home or commercial property.

The business of title companies focus on researching the claim or lineage of ownership associated with the home or business property. It involves a complete review of the current deed or title. This is the only way to ensure there are no questionable factors or defects in the documentation. It is the duty of a title company to establish lineage of every past legal owner as it has been passed down or transferred to new owners.

Once title of the property has been firmly established, a title company will perform research to ensure the property has no current liens, except those that are fully acknowledge by the current owner. Any failure in locating any other lien could instantly jeopardize the sale of the property and possibly invalidate the title claim.

Anytime any irregularity is uncovered during their investigation, the title company will work with the seller, or representative, to resolve all issues. This can help pave the way to ensure that the sale of the property has a smooth transition. Typically, title companies remain involved throughout the entire closing process, and will often oversee the transferring of funds to ensure that the sale is complete.

Establishing a Valid Title

After the process of validating the title and identifying all known and previously unknown liens filed against the property many title companies will provide a “title binder” as insurance. This property insurance provides protection during the time it goes up for sale until the closing process is complete. In actuality, this temporary insurance will only remain in effect until the closing has been finalized and the new title has been issued and released to the new property owner.

What are Title Companies Other Responsibilities?

In detail, a title company will perform a variety of duties as a way to coordinate the real estate transaction interest of all parties involved. This will include the seller, buyer, real estate agent and mortgage lender. It is the duties of the title company to ensure that the settlement by all parties is fully satisfied. They do this by providing a variety of services that include:

• Title Abstract: As stated above, the title company provides a comprehensive title abstract, detailing the property’s history and its ownership. This includes every claim on the property or lien filed against it.

• Survey: Nearly every financial lender will require that the property is surveyed. The survey will involve a specific location drawing of all improvements on the land. With the buyer’s authorization, the title company will have the land surveyed, with the results given to the homebuyer during settlement.

• Property Taxes: State and local property taxes will be verified to have been paid, along with a list of any outstanding payment.

• Title Insurance Policy: The title company can provide an insurance policy to the owner, lender, or both. This protects both parties in the event of any unforeseen hidden risk, fraud, or claim against the property.

• Loan Documents: The biggest task involved in a title company is the coordination of all loan documents necessary for closing. All forms will be fully reviewed, including the details of all associated costs.

• Closing: During the closing process, every document will be fully explained by the title company to every party before being signed.

In determining what are title companies responsibilities, the answer is many. Without the skills and experience of title company employees, it would be nearly impossible to have a smooth transition of delivering a clear title from the seller to the buyer.