The average person doesn’t buy more than 1 or 2 houses in their lifetime so the transaction is viewed as pretty substantial. Most homes cost ten of thousands of dollars and some are upwards of that, so you can see why banks and homeowners alike take steps to preserve the value and ensure the transfer of the property.
The most important responsibility that title companies have is to make sure that the title goes from the seller to the buyer easily and actually is what it is supposed to be. If it supposed to be a 10 acre parcel, the title company ensures that, as well as any existing liens or other encumbrances on the property.
It would be Title Company’s prime responsibility to provide the necessary comfort and assurance to the buyer that the property he intends to buy is free from any legal trouble and would not lead to any ownership dispute once the buyer closes the transaction.
As soon as both parties sign the purchase and sales agreement, the file is sent to the title company who immediately start working. They assess the compliance with all local and federal laws and regulations and take care of the following:
Verification of the seller
Their main role is to establish the seller in whose name the property is registered as per the legal documents submitted with the State. The title companies find out the legal owner of the property by examining and verifying the public land record held by state.
The title is legally transferrable
The title company also confirms that the buyer can take title in a clear manner. This confirms that all liens and encumberances have been cleared out and there are not any other remaining issues with the title.
Title insurance
In many instances, the title company also organizes for title insurance to the buyer against any legal risks that might surface in the future. This would insure the buyer against any ownership issue emerging in future and costs involved in litigation and other matters related to settling any dispute regarding the sale being made by the actual owner of the property. Though the buyer has the right to choose his title insurer, the buyer usually prefers the same company with whom the lender takes tile insurance cover.
The final stamp of approval is called the “Commitment of Title Insurance” and is issued only after the title company has signed off on the authenticity of the property title. All parties including realtors, lenders and seller and buyer get copies of the document for their own records.
Your responsibility to investigate the property you are interested in doesn’t stop at trusting the professionals you hire to take of things. You must also act to disseminate the liability of the transaction through as many responsible entities as necessary for your own protection.