Why Do We Need To Use A Title Company?
November 7, 2009 by Gavin King
Filed under Investing
The average person does not buy more than 1 or 2 houses in their lifetime so the transaction is viewed as pretty substantial. Most homes cost tens of thousands of dollars and some are upwards of that, so you can see why banks and homeowners alike take steps to preserve the value and ensure the transfer of the property.
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.
The title company starts playing its role as soon as the sales agreement is signed between the buyer and the seller until the time that the title is transferred from the seller to the buyer. They have to ensure compliance to the necessary real estate laws and regulations of the state in which the transaction takes place. The primary role and responsibilities of a title company is covered in the sections below
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.
The property title can be legally transferred
The title company also confirms that the buyer can take title in a clear manner. This confirms that all liens and encumbrances have been cleared out and there are not any other remaining issues with the title.
Insuring the title of the subject property
In many instances, the title company also organizes for title insurance to the buyer against any legal risks that might surface in the future. This would insure the buyer against any ownership issue emerging in future and costs involved in litigation and other matters related to settling any dispute regarding the sale being made by the actual owner of the property. Though the buyer has the right to choose his title insurer, the buyer usually prefers the same company with whom the lender takes tile insurance cover.
The final stamp of approval is called the “Commitment of Title Insurance” and is issued only after the title company has signed off on the authenticity of the property title. All parties including Realtors, lenders and seller and buyer get copies of the document for their own records.
It is in your interest to get all ownership and legal details about the property that you intend to buy. Share the responsibility with the company checking the title for your property and understand the details that they provide.
Gavin King is the Designated Broker of Realty In Idaho and enjoys writing articles on kuna idaho homes for sale and homes for sale in boise idaho
