What Does a Title Company Do and Why Do I Need to Work with One?
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When you are buying a new home or selling your current house, it’s important to use a good title company to ensure a smooth closing. This helps to reduce stress and gives you peace of mind from the beginning of the home buying process to the end.
A title company usually plays several key roles when you buy or sell a home:
- Provides title services
- Issues insurance policies
- Facilitates closings
- Finalizes files
- Records paperwork
Depending on the state, title companies also issue insurance, hold onto funds and paperwork in escrow, and can serve as closing agents. Make sure you choose a title company that gives you (and your Realtor) timely updates so that everyone stays on the same page throughout the whole process.
If you are selling your home: Almost everyone who sells a home utilizes the services of a title company during the selling process. Before you can sell your house, you must “clear the title.” But what does that really mean? Having a clear title before the sale of your home is complete will help guarantee that no one else can claim the property you’re trying to sell as their own.
The title company will search public records, check out the history of the property (i.e. looking for liens on the house, outstanding taxes, divorce decrees, or any other issues that could potentially pop up to delay closing). If any issues like these arise, you must clear them up before selling your home. You won’t need to attend the closing, but you will need to be available to sign any necessary paperwork prior to closing.
If you are buying a home: Working with a title company when buying a new home can help protect you against fraud and safeguard your money and documents in escrow. They’ll also oversee the final steps of the closing process and search for any issues with the house title.
As part of buying a home, you’ll need to get title insurance (through the title company) in order to protect yourself from against any potential home property ownership issues from the past surface. The policy is good for as long as you (or your heirs) own the home and usually has a one-time premium that’s paid at closing.
Who decides the title company—the buyer or the seller?
Negotiations between the buyer and seller usually determine the selection of the title company. Typically, whoever is paying for the title insurance will choose the title company although this can vary from state to state, and sometimes even within counties.
As a home buyer what should you expect on closing day?
The final step of buying a home is called closing. Your closing day is usually determined up front when the buyer and the seller agree on an offer in the contract and the appointment time will be scheduled.
Step 1: When you arrive at your closing, your signing agent from the title company will be there to help guide you through the process. Your real estate agent (if you’re using one) may also be there.
Step 2: Sign your paperwork (Closing Disclosure, loan documents, and title company documents). Your signing agent will walk you through each document before you sign and answer any questions you may have.
Step 3: Your signing agent will verify your signature and notarize it. Usually a closing specialist will be on hand to double check everything as well.
Step 4: You’ll be notified that everything has been completed and approved.
Step 5: It’s time to celebrate!
The main thing to remember is that title companies can help protect your investment. And while issues with titles are not a common thing, it’s important to make sure that you take steps to safeguard one of the biggest investments you’ll probably make in your lifetime.
