Should I use a title company when buying or selling real estate?
There are many reasons for buying or selling a home without the assistance of a realtor, but one service provider you shouldn't complete a transaction without is a title company. This is especially true with a for-sale-by-ower purchase or sale. Using a title company not only ensures that your closing goes smoothly, it also safeguards your transaction.
What Does a Title Company Do?
A title company's job is to make sure the closing is completed correctly and orderly. To do this, the company will make sure all the paperwork is in order, conduct a title search and order the reports and surveys needed to transfer property ownership.Two of the biggest contributions of the title company are the title search and providing title insurance.A title search is a public records examination of the property's title. This research determines that the property is free and clear of liens and is eligible for sale. The very last thing you want to do is buy a house and then find out there are liens against it, or worse, a co-owner didn't sign off on the sale! A title search will uncover issues like these so they can be resolved before the closing.Title insurance is required by most mortgage lenders. This insurance protects the lender (and a separate policy protects the buyer) from unforeseen defects in the title. These problems may not show up in the title search, which is why this extra protection is needed. A title insurance policy protects you from claims against the title. It's a one-time fee, paid at closing and never again.
Other Services from the Title Company
- Closing Facilitation: The title company can host and facilitate the closing on neutral ground. As an impartial service provider, the agency does not work for the buyer over the seller, or vice versa. The title agency just wants the sale to happen, and it's their job to make sure it does. A title agency does this by collecting all of the documentation needed from both sides, making sure it's all filled out properly and signed. Having a second set of eyes to look over everything is especially helpful in a for-sale-by-owner transaction.
- Paperwork Filing: The title agency files the closing paperwork with the appropriate government agencies and makes sure the buyer, seller and mortgage lenders all get copies of the closing documents.
- Escrow and Notary Services: Title agencies can also act as escrow agents, hold earnest money and disburse funds. They can also provide notary services for document completion.
- The important thing to remember is that the title company is there to help all parties close smoothly and efficiently. Without the title company, you may experience unnecessary delays and/or unforeseen issues