What does a Title Company do?

We all know that often in life things are not fair and that sometimes people fail to receive the proper recognition for what they did or do on a regular basis. Somebody else steals all the glory and embraces the rewards, and this happens everywhere around the world and in different areas of life. One such area is the world of real estate, the world so bustling and fast that a lot of people fail to recognize the real hero and often forget that this hero pulls the biggest load in an ordinary real estate transaction. This unsung hero we talk about is called a title company,  and they are “robbed” of their rewards by real estate agents or real estate attorneys.

SCHOOL-BUSINESS TIES OPEN DOORS FOR STUDENTS (400 x 300)However, the role of a title company is pretty important in the process of real estate transaction, mostly because this kind of company serves as a “bridge” between a buyer and a seller but it remains neutral and impartial. This third-party status is important because both sides get equal treatment and can rely on title companies to hold the money for the real estate transfer and serve as a repository. Because of strict ethic codes and rules of conduct, title companies have to be unbiased and professional at what they do, and this is the reason why people have so much faith in them.

Chronologically, the first activity that a title company performs when hired in a real estate transaction case is to do a title search. A title search is just a fancy name for a detailed and thorough examination of all files and records that may contain information about the ownership of the real estate property in question.  What this search tries to establish is who has claims on the property and is the seller the only titleholder. Sometimes other people have ownership claims, or they share a percentage in the property distribution, all of these scenarios can present an encumbrance.

Once the search is over and the property is free of encumbrance, title company publishes its findings in a little something that we call a title abstract. This is basically a written report that contains the history of ownership, and this paper is important since it allows the seller to buy a title insurance policy. This policy is a kind of guarantee that there will be no fraudulent claims about the ownership and that everything is done in accordance with the law.

Keys to Home Ownership

The money for the policy and for other expenses, such as taxes and contract fees are kept on an escrow account  managed by the same title company that is hired to work on the case, and these funds are held there until the very end of the settlement. Once the closing is done, the funds are disbursed in accordance with the arranged method.  Title company plays a role of an impartial custodian of funds in this respect and this role certainly makes the real estate  transactions safer and, therefore, quicker and more efficient.

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