5 Things a Title Company Does in a Real Estate Transaction
June 1st, 2023
If you’ve ever bought or sold a home, you know it’s not as simple as exchanging money and signing a few documents, which is where a title company comes in. A title company is a third party that works on behalf of all parties to verify that the seller has the legal right to sell the property and helps transfer the property rights from seller to buyer. Of course, there are many other things they handle, so today, our experts at Evergreen Home Buyers have compiled a list of 5 things a title company does in a real estate transaction so you can be knowledgeable and prepared for your next deal.
1. Do a Title Search
One of the primary roles of a title company is to do a title search to ensure that the home’s title is clear and that no relative, contractor, or creditor can claim that they have a right to it. Why is this so important? If a title search is not completed and you find out that the seller was only a part owner, the other owner could show up at any time demanding their share of the property, which would obviously be a nightmare. By working with a title company, you can avoid this situation and move forward confidently, knowing the home’s title is clear.
2. Complete Additional Research
Beyond a title search, a title company will also complete additional research critical to the closing process. For example, they can do lien searches to make sure there are no collateral claims from creditors or contractors that would affect the closing, and they also will complete a property survey to confirm a home’s land boundaries (which most lenders require). Although this research is mostly to satisfy lender requirements, it can also benefit you as well. For instance, a property survey can reveal zoning and building restrictions that could affect your plans for the property.
3. Provide Title Insurance
Another big thing that title companies do is provide title insurance. There are two kinds of title insurance – one for the buyer and one for the lender – and they’re both in place in case title issues surface. You’re probably wondering, “Why would I need title insurance if my title company has performed a title search and it’s clear?” Well, unfortunately, sometimes things get missed in the title search, but if someone comes forth with a claim for the property, you’re protected with title insurance.
4. Manage the Closing Process
If it’s not clear by now, a title company plays a crucial role in completing a real estate transaction. They manage the closing process, which can involve many things, including (but not limited to) providing settlement services, recording the deed with the county, drawing up closing documents, and finalizing the title transfer. A title company is such an integral part of the closing process that at Evergreen Home Buyers, our preferred title company is right next door to our office, and we see them more as a partner in our business rather than a third-party vendor.
5. Hold and Distribute Funds
Finally, a title company will hold and distribute funds as necessary to the seller, lenders, and any third parties entitled to compensation for services they performed for the transaction. This ensures that the buyer cannot withdraw money from the sale without proper reason, leaving the seller high and dry. They’ll also hold the funds if there is a dispute between parties until a mutual agreement is reached.
Although there are many steps to take and things to consider when selling or buying a new home, having a great title company in your corner can make all the difference. They take the stress out of dealing with the closing requirements and streamline the process so you can focus on other things to complete the transaction. At Evergreen Home Buyers, we work closely with our title company with each transaction to ensure the closing process goes as smoothly as possible for our clients.
With that being said, if you’re thinking of selling your Jacksonville home AS IS for cash, we make the process entirely hands-off for you with no repairs, inspections, appraisals, or contingencies necessary. Plus, we can close in as little as two weeks! So, for a completely quick and painless way to sell your home for cash faster, visit www.selltoevergreenjax.com today.