You do not generally buy more than a single property in your lifetime. It is a high value transaction involving legal risks. Besides using a professional home inspector for pre-inspection of the home, the buyer has to rely on a number of other professionals such as real estate attorney and a title company.
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.
Realtors involve the title company as soon as they have an accepted contract by sending the file to them as soon it is signed by all parties. The title company immediately confirms all compliance with pertinent laws and regulations and then oversees the transfer of title and the following responsibilities as well
Making sure the sellers are who they are supposed to be
This step essentially confirms that the supposed seller actually owns the property and can legally convey it, their identity and marital state. The title company also submits all legally required documents.
Property has Clear Title
The other important objective of the title company would be to ascertain the title of the property being purchased by the buyer is absolutely clear. This would mean that the property does not encumbrance or is not under lien. There is no property or any other fiscal tax or costs due by the seller to the state.
Insuring the title of the subject property
The title company also sells the buyer a form of insurance protecting them against any future difficulty with the title called “title insurance”. This insurance policy takes care of any legal and administrative costs in settling any disputes involved in the title transfer. Both, the buyer and the lender purchase title insurance policies to protect their own interests.
When a title company is satisfied with respect to title of the property, they issue a document called as the “Commitment of Title Insurance” to the mortgage lender along with a copy to the other parties involved in the deal i.e. the buyer, seller, realtor and the real estate attorney. As a buyer it is essential that you understand the role and responsibility of the title company.
You have to gather all the information regarding the property your are purchasing a you spread out the liability for this step by hiring the appropriate entities to do so.
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