The Role Of A Title Company In A Real Estate Transaction

Once the buyer and seller of a property enter into a formal purchase agreement, the title company plays a large role in getting the transaction closed. The title company has many tasks to perform to get both parties to the closing table. They perform title searches for any and all existing liens and claims on the property, maintain escrow accounts and prepare title insurance policies. When a property seller and a buyer enter into a formal purchase agreement, a title company usually plays a large role in the formal closing of the transaction. Title companies help sellers transfer their titles, and they help buyers take possession of titles. Title companies also conduct title searches for any existing claims or liens on properties, prepare title insurance for sellers, and maintain necessary escrow accounts for all parties. Also, after the transaction is closed, title companies make sure that the new property titles, deeds and other documents are recorded properly with the appropriate entities.

Closing Agents

Title companies have closing agents, or settlement agents, that often conduct the actual closing of the real estate transaction. For the closing of a property, title company closingagents prepare all documentation required for the particular transaction and present all the documents at closing.  Also at closing, the closing agent will explain all the documents to the parties involved, collect closing cost and distribute the funds from the transaction to the appropriate parties, like commission checks for example.

 Maintain Escrow Accounts

Another important task of title companies is to maintain a variety of real estate escrow accounts on behalf of buyers and sellers. These escrow accounts hold the money used to complete the real estate settlement and closing procedures. All parties involved in the transaction, sellers, buyers, mortgage lenders and real estate brokers all rely on the title company to be honest and impartial when holding and disbursing from the escrow accounts.

Issue Title Insurance

One of the main roles of the title company is to issue title insurance to a buyer to guarantee against fraudulent ownership claims and future claims based on prior risks. It is custom for the title insurance to be part of the seller’s closing costs and all lenders require title insurance before funding on a home loan.

Conduct Title Searches

When a property is sold, a title company will conduct a search of the property’s title history for defects or claims.  These defects or claims include items such as liens or easements, which can affect the ability to market the property and transfer title to the property. As with title insurance, most lenders will require a title search before lending any money on a property.

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Ben Gibbs

Title Junction, LLC

6225 Presidential Ct. #100

Fort Myers, FL.  33919


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