Whenever you purchase or sell a house, and you are holding a completely executed contract, the next step involves opening up escrow with a title company. A great number of persons really do not have a clue what it is that a title company actually does, nor why they require a title company to become involved in the transaction.
In the middle of the transaction in order to safeguard both buyer and seller, a title company remains an essential part of this arrangement. What are we suggesting when we discuss safeguarding the two parties? Allowing you to receive your title on the property without any liens or additional types of challenges to the title, the title company will literally vouch to both parties that there is a clear title available on the property in question. Unless a title company is able to produce a clean title report, such a cloud over the deal can cause the purchaser to walk away, unless of course the title company is capable of clearing up and guaranteeing the title for the buyer.
Another function that title company’s provide is to gather all public information on any existing covenants, conditions or restrictions either for the property or the community at large and provide these to the potential buyer. Title companies also ensure that all documents are properly signed and witnessed on the day of closing. For the buyer, this means signing the loan documents that have been forwarded to the title company as well as the title documents and for the seller it means signing over the property with the deed that the title company has drawn up.
After all signatures are present on the documents, they return to the bank for funding, after which all the documents again return to the title company for them to courier over for literal recording in the public records departments, making the transaction legal; and finally the home is put into the name of the purchaser and the loan is paid off so that the new load may be associated with the property. Finally, the title company obtains the monies from the purchaser for the closing costs as well as down payments, and then they turn over all of the monies to the seller, after the home has been fully registered and the sale closed out.
The current drop in home sales has affected title companies as well, with many either closing down or reducing staff, but this is to be expected in the current housing market. Your best option is to find a title company that has been in business for a fairly long time. In most home sales, the buyer selects the title company but if you’re buying a house owned by a bank, then the bank will probably require that you use a particular title company.
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