Real Estate – Report Source

When you are buying or selling a house and you have a fully executed contract the next step is opening escrow with a title company. For many buyers and sellers, title companies remain something of a mystery and they don’t understand why they should be included in the procedure.

A title company is a very important part of the transaction and is there to protect both parties. So what are we referring to when we discuss protecting the parties? They will actually guarantee the parties that you have what is called a clear title meaning the new owner will get the title on the property free of liens or and other clouds on the title. Unless a title company is able to produce a clean title report, such a cloud over the deal can cause the purchaser to walk away, unless of course the title company is capable of clearing up and guaranteeing the title for the buyer.

Such a title company will furthermore strive to resolve additional details, such as obtaining public reports, conditions, covenants, and restrictions for the community itself and handing them over to the purchaser to consider. They also take care of all of the signatures for both seller and buyer. For the buyer, this means signing the loan documents that have been forwarded to the title company as well as the title documents and for the seller it means signing over the property with the deed that the title company has drawn up.

Placing the house in the buyer’s name and actually liquidating the existing loan before attaching the new loan to the property, after all parties have finished signing, the loan documents are sent back over to the loan officers for funding of the loan, and finally all of the paperwork returns to the title company one last time so that they are able to send the documents out to be recorded, as this finalizes the transaction. Finally, the title companies will collect any closing costs and down payments that the buyer agreed to pay and will provide the seller with any remaining proceeds once the loans and costs have been paid and the sale officially recorded.

A vast number of such title companies have gone out of business or had to reduce the numbers of offices that they maintain in the present housing collapse, and yet consolidation is not uncommon in this type of market. Your best option is to find a title company that has been in business for a fairly long time. In most home sales, the buyer selects the title company but if you’re buying a house owned by a bank, then the bank will probably require that you use a particular title company.

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