What Is the Role of an Escrow Title Company During the Home Buying Process
The process of buying or selling a home can become quite complicated, and services such as escrow title companies exist to simplify it as much as possible. These companies can take on a variety of roles and provide buyers, sellers and lenders with a number of excellent services that are not only an asset to a smooth transaction, but also required as part of the real estate purchase of any commercial and residential property.
Understanding Title Companies
Escrow title companies are companies that act as the middleman between sellers and buyers when it comes to ensuring a secure and smooth transaction process. While real estate agents might handle a lot of the negotiations and paperwork required for a real estate sale, it’s the title company that does the research necessary to find out whether or not any outstanding liens or other problems related to the title still apply to the property. Also, these companies can act as escrow agents whenever it’s needed, meaning that they are able to withhold the large sums of money involved in a transaction, keeping them as deposits until the transaction is completed successfully. Finally, the company might also handle additional tasks such as making sure the seller has the maximum rights to sell the property and ordering the property survey.
Title Companies as Escrow Agents
As escrow officers, escrow title companies are able to do a lot to ensure the secure completion of the transaction process. This isn’t just about the money, but also about the legality and transparency of the transaction involved. The title company might be tasked to hold the money of one or more of the parties involved, or to keep hold of important documents that are relevant to the transaction or the sale process. For example, the seller might surrender a signed deed before the buyer makes the payment to purchase the home. In this case, the title company might be tasked to hold on to the deed until the payment goes through.
The Importance of Title Insurance
Title insurance is extremely important in a real estate transaction, and conducting the title search is the main activity that escrow title companies are known for. The title search involves a process by which the buyer, seller and/or lender might acquire relevant information about the history of a property’s title and how it went from one buyer to the other. Additionally, the title search might uncover anything from unpaid HOA fees to second mortgages, liens or unpaid taxes that are still highly relevant for establishing the property’s status and whether or not the seller has the right to actually sell it.
Who Does a Title Company Really Serve?
Title companies are normally supposed to be impartial and serve every party involved in the sale equally. However, depending on whether the buyer, the seller or the mortgage lender or bank hired the company, their allegiance can differ. Some experts will go so far as to discourage buyers from using the same title company that the seller recommends, on the grounds that the deal might end up being detrimental to the buyer. As a result, you should always consider carefully which escrow title companies you use, and do your own research before accepting any arrangement.