If you have recently purchased a home – or are seeking to buy a property – you have likely heard the term “title company.” It’s important to understand what this type of business does to help home sellers and prospective homeowners. Before delving into how a title company relates to real estate, however, it’s essential to define what a property title is.
What Is A House Title?
A house title is a process or examination that serves as proof of legal ownership of a home. These records are different from a deed, which – although it also functions as proof of ownership – you typically receive a copy of the deed at closing and that serves as a vehicle for transferring your property to another individual. (Deeds are typically recorded in a courthouse or with a local county clerk.) The process of a title examination generally includes a description of the property and states whether there are any liens (legal claims of ownership) or easements on it.
Services A Title Company Provides
A title company is a third-party entity that provides services on behalf of both the buyer and the lender. This organization conducts research on a home’s title to ensure that it is clean upon transfer. A title is considered “clean” if it is devoid of defects such as liens, encumbrances, unpaid taxes, or prohibited uses among other issues. All of these issues, which create a “cloud” on a title, can potentially result in costly lawsuits. Therefore, it is a wise decision to seriously consider purchasing title insurance.
Title Research And Property Survey
In some places, a survey is required to close on a property and serves as a way to verify that the home occupies only the area listed on the title. After the title examiner has performed extensive research on the title, it normally issues a report known as a “title abstract.” The buyer and mortgage lender both receive a copy of the abstract to review prior to closing. You should keep in mind that this report is different from a title insurance policy.
Title companies generally offer two types of title insurance policies: an owner’s policy (for you) and a lender’s policy. The cost of title insurance (and who pays for it) varies by state. However, one thing is true about title insurance everywhere: it is a one-time payment made at closing, rather than a monthly or annual premium, as is the case with most other types of insurance. An extended owner’s policy will protect you from additional liabilities at an additional one time cost. A title company will work directly with an underwriter to issue an insurance policy.
Title companies often hold money in escrow. This type of account, which only distributes money if certain conditions are met, is frequently used in real estate transactions because lenders wish to verify that you have sufficient funds to make certain payments.
Your title company will typically handle the home closing process as part of their “real estate settlement” services. This involves selecting an agent or attorney to assess all closing documents and facilitate the title transfer process. This professional will always ensure that both the buyer and seller completely understand what they are responsible for upon closing.
A title insurance policy is valid for as long as you and your heirs retain an interest in your property. Should you decide to re-sell your home within a few years, you may apply for title insurance binder coverage. This addition to your policy is valid for two years.
Speak To The Title Company For Insurance From The Experts At Mathis Title
Reach out to the professionals at Mathis Title Company for more information about title insurance and real estate settlement services. We are dedicated to providing these services, as well as legal advice, to buyers, sellers, and lenders throughout Northern Virginia.
During the sale and purchase of a home, Mathis will hold the funds being transferred in an escrow account prior to title transfer and closing. Once the title order has been approved, we will begin a title search to ensure a clean title transfer and you will be given a preliminary report to review and approve. We will then work with one of our trusted underwriting companies to issue a title insurance policy. We can offer you a standard or extended owner’s policy, depending on your unique needs.
Robin Mathis is an attorney who has more than 35 years of experience in real estate settlement services and who has performed thousands of closings, both small commercial and residential. Ann Andreatos is a title agent with over 14 years of experience in the title and closing industry.