What is a title company?
Title companies conduct “title searches” looking at real estate records trying to find information about the property you are trying to purchase. Such information includes:
- Identifying the legal owner of the property
- Unpaid taxes
After the search is complete, the title company will complete a “commitment of title insurance” on behalf of either the lender or the buyer. This step ensures the buyer is receiving a clear title on the property and any outstanding issues are resolved. Once these steps are done, the title company will use their underwriter to issue a policy of title insurance covering the lender and the buyer.
Can a title company conduct escrow?
A title company generally acts as an escrow agent. They can explain all the costs involved for both parties, secure the lender, and prepare a closing statement. The title company will then collect money from both buyer and seller, signed documents, and approval given by lender. The lender wires money to the title company to pay all the expenses, any mortgages, and the seller their proceeds.
What is a title?
A title is a right to ownership of specific real estate property. Included is the right of possession, right of exclusion, right of control, the right of enjoyment, and right of disposition. Titles can change hands through a will, court decree, law, or by selling the property. Any time a title is transferred it is recorded in a deed and filed with county clerks.
What is title insurance?
Having title insurance protects the lender and the buyer from financial loss due to title defects.
How does title insurance protect you?
The insurance policy will pay for any legal defense costs and reimburse you for any mortgage payments you are unable to make due to losing the house to someone else’s claim on it.
Do I need title insurance?
Unless you are paying for your home out of pocket, your lender will more than likely require you to purchase title insurance. It’s advisable to purchase a policy to protect yourself as well. By doing so, you are protecting yourself from title defects that may give someone else claim to your property.