What Does a Title Company Do

What Does a Title Company Do

What Does a Title Company Do to Help Avoid Title Claims?

If you sold real estate in the past, you might have wondered, “what does a title company do to help me out anyway?” This is a question that doesn’t get asked often enough, and as a result, buyers are not always informed on all the benefits that a reputable and dependable title company can offer. By looking through the various tasks and activities attributed to title companies, you can find out more about the main advantages of working closely together with a dedicated title company. You’ll also find out how paying for title insurance can actually save you from countless hours of stress and even from losing your entire property.

Tracking Down Improperly Recorded Title Deeds

So, primarily, what does a title company do? It performs title searches. But, unlike what you might have heard about this process, it actually goes much deeper than you might assume. When you buy a property, you only become the owner when your name appears on the deed recorded at the local courthouse. Now, this can’t happen until all necessary payments and liens on the property are met. However, because records aren’t always kept accurately, some deeds and their liens get overlooked when the real estate property changes hands. The title company is tasked to find these discrepancies, even if they are extremely difficult to find.

Why Title Companies Are Needed in the First Place

Now, when considering the question of “what does a title company do to help you out as a buyer,” you might argue that a good attorney should be able to find all the deeds and discrepancies that are associated with your company. While this might be true, not all attorneys and real estate professionals have the knowledge, expertise or experience to look through old records, track down old property owners and find financial documents that could prove there are unpaid liens on your property. Hiring an attorney for the job could cost you more, and the process could last longer, while the results will be far less satisfactory. Moreover, as you will see below, a title company actually provides you with insurance payouts, if they mess up your title search, and a claim is made.

Title Insurance Policies and Payouts

So now you know more about what a real estate title company’s role is. But what does a title company do when the title search fails to discover all the problems with a real estate property, and a claim is made? These are the instances when your title insurance policy kicks in. While the title search should guarantee that you won’t have to deal with any claims made against you, that isn’t always the case. The title policy will cover you through title insurance payouts that will be made to provide you with compensation. This course of action is taken when documents are overlooked during the search, or a lawsuit has unforeseen negative consequences.

The Title Company and Closing Tasks

That’s all well and good, but what does a title company do at closing? How do they help with closing tasks? During a real estate transaction, some companies play the role of the closing agent for both the buyer and the seller. As they accept that role, they are charged with gathering documents and signatures from both parties and from the lender. They also record documents such as deeds and mortgages, and they are tasked with receiving and distributing the payments relating to the transaction.

Title Companies and Loan Documents for Closing

The title insurance company also coordinates with mortgage lenders in order to receive and review all lender documents and forms for closings. The company will review all the documents and forms, and comply with the lender’s requirements. Moreover, they may also have the task to complete the HUD-1 statement, which is one of the most important statement required for a real estate transaction. Knowing all these details is key to understanding the answer to the question, “what does a title property do, and why should it interest me as a buyer?”