Up until you begin the process of purchasing your own home, there is an important player in the real estate market that is frequently disregarded.
The title business, which unites all the parties involved in the home-buying process under one roof, is the agent of agents. The buyer, the seller, and the mortgage lender are the three parties engaged in the acquisition of your home that your title firm represents. To approach your home purchase with confidence, it is vital to understand the distinct responsibilities and roles of the title firm.
The title company serves as your home's compliance officer in many ways when you buy or sell it. They ensure that the ownership transfer is done correctly and that all legal formalities are met. Title companies offer a vital service for any home sale or refinance. The purchasing and selling of a house would be difficult without the administrative and legal assistance of your title firm.
A title company's initial responsibility in a house transaction is usually carrying out an exhaustive investigation into the property's past.
One of the tasks involves examining all previous transfers, owners, and liens to determine whether the title is clear and ready to be transferred to a new owner,
While not all home transactions have title issues, it's good to be aware of what these problems are to know which ones to look for and how to avoid them.
In the previous post, we discussed the common title issues in detail. Below, we'll give you a brief overview of what some of these are:
Is a third party currently leasing the property? In that case, even if the seller or seller's agent neglected to provide this information, the title search will make it clear.
The IRS may put a lien on a homeowner's property if they fall behind on their taxes. In the event of a sale, the lien cannot be removed from the title until it is paid in full. A home equity line of credit, past-due HOA dues, and, most obviously, a mortgage are some other frequent liens. For the title to pass to the new owner, these must all be paid in full at closing.
The grant of a non-possessory property interest that allows the easement holder to utilize another person's land is known as an easement. The word "easement" refers to a certain kind of property right that the people using it own.
The title company will publish a report with its results once it's completed. The title search and report will disclose any current issues and claims on the title that can result in further litigation.
Without completing this step of the title process, mortgage providers will not grant a mortgage. Meanwhile, the home buyer and the mortgage company's investment were protected by removing obstacles from the title before the home sale.
Following the publication of the title report, the title company will produce a title opinion letter, which will affirm or deny the title's legality, as well as an abstract of the title, which is essentially a summary of the report.
Issue Title Insurance
The title company's next responsibility is to provide insurance that covers the lender and the buyer.
The home buyer is required to purchase the lender's title insurance to ensure the value of the mortgage if there are any upcoming title problems. However, the said insurance will not protect home investment; title companies provide owner title coverage instead.
Although most states do not need it, owner's title insurance protects the house equity if an unforeseen problem arises with your title. In the event of a lawsuit or title fraud, both forms of insurance are meant to safeguard your investment.
Escrow And Closing
Managing the escrow and supervising the closure of your house transaction is the last and most important duty of a title business. The escrow account protects the money transfers—such as earnest money, down payment, and closing expenses and fees—that are necessary to finish the sale or acquisition of your property.
The deed, title, and other legal papers are some of the documents the title business maintains and safeguards before the closing. When the time comes for your home to close, everyone usually gathers at the title office to sign the paperwork, finish any outstanding business, transfer the monies, and transfer ownership—all while being guided by the firm. While some states handle this phase through an escrow agency or real estate attorney, many states still employ the title business as the administrator of all closing processes.
Disbursing The Funds
Disbursing the closing funds is part of the closing process for your house. The loan proceeds will be mailed to the title firm by the lender.
Meanwhile, the buyer will also give the title company a share of the closing money. Cashier's checks or wire transfers are some of the payment platforms accepted. The deal is considered completed once all payments are paid to the right party, which is the seller.
The Right Title Company
Now that you know the basics, the next step is finding the right title company in Indiana.
Just like how you would look for a reliable real estate agent, you should evaluate several title companies to see how helpful, responsive, and upfront they are about their procedures.
Ask your real estate agent or attorney for referrals if you have trouble deciding which title firm is best for you.
Every day, these professionals deal with title companies in real estate transactions, and they have reputable, courteous organizations that they will use again and time again. To learn how to choose the right title agency, click this link.