If you are preparing to buy a new home – or sell your current one – there is one type of business you should always work with: a title company. This business can help make the homebuying (or selling) process significantly less overwhelming. Before discussing exactly what a title company does, however, it’s important to understand what a title is.
What Is A Home Title?
In real estate, a title is a document that serves as proof that you legally own a property. This is different from a deed, which is typically used to transfer ownership of a property. A title also allows you to use the land your property sits on in any way you like, barring any laws specific to the area you live in and as long as you don’t encroach on your neighbor’s land.
Services A Title Company Provides
Before issuing title insurance, there are three distinct actions that a title company takes to ensure that your title is “clean;” in other words, that it is devoid of issues or defects. Examples of common title defects include unpaid taxes, unknown liens, property restrictions, easements, and public record errors. Here is a close look at the three services a title company provides as part of its due diligence prior to creating a title insurance policy.
Perform A Title Search
The first step in the process of creating a title insurance policy is to conduct a title search. This consists of looking for potential barriers to the transfer-of-ownership process. Aside from claims of ownership of the property filed by other people, a title search can also unveil:
- Outstanding mortgages;
- Existing liens such as a loan to pay off solar panels;
- Unpaid Homeowners Association (HOA) dues: in extreme cases, this can result in foreclosure;
- Property restrictions and easements;
- Leases; and
- Judgments: If the previous owner of your home has failed to fulfill an obligation (e.g. pay taxes), you can bring them to court, where the party filing the complaint may obtain a judgment that remains with your property until full payment is made.
Conduct A Property Survey
The primary purpose of a survey is to uncover issues such as encroachments and to ensure that your property is within its established boundaries. An encroachment can be especially problematic if it results in property damage. Although exceptions to encroachment rules exist, every issue should always be properly addressed. Additionally, you may need to receive an endorsement for an exception or insure for it, for which there may be a waiting period.
Prepare Abstract Of Title And Title Opinion
An abstract of title is a legal record of a property’s ownership history. It includes the date of the property’s sale, as well as documentation pertaining to tax sales, lawsuits, and inheritance. An opinion, meanwhile, is a document that a title company prepares to declare that it believes the seller’s title to the property is valid and that it is willing to insure the title, whether or not the buyer has chosen to refinance.
Once all three of these steps have been taken, a title insurance policy can be issued. Some title companies work with underwriters to do this and place the funds being transferred during the sale and purchase of a property in an escrow account. There are two types of title insurance policies: a lender’s policy and an owner’s policy. For the latter, the policy can either be a standard one or an extended one, which can protect you from additional liabilities such as living trusts, structural damages, and previous ownership covenant violations. Title insurance is generally valid for as long as you and your heirs retain an interest in a property.
Speak With The Expert Title Company
Reach out to the professionals at Mathis Title Company for more information on title insurance and its benefits. We are proud to offer title insurance and other real estate settlement services, including legal advice, to buyers and sellers throughout Northern Virginia.
During the sale and purchase of a home, Mathis will hold the funds being transferred in an escrow account. Once the title order has been approved, we will begin a title search to ensure your title is clean, and you will be provided with a preliminary report to approve. We work with several trusted underwriting companies to issue a title insurance policy.
Our team is led by Robin Mathis, an attorney who has more than 30 years of experience in real estate settlement and who has performed thousands of closings over the years, both small commercial and residential. Call Mathis Title Company today at (703) 214-4020 or contact us online to learn more about our services.