What is a title company’s role in the homebuying process, and why do you need one?
Title companies are a critical part of the homebuying process. While buying a house for the first time can be challenging, it doesn’t have to be. Most people don’t think of the title company as one of the key players in this process. However, title companies take on four critical roles during the homebuying process.
Learn more about their role and why they’re important.
An essential role of title companies in homebuying is conducting a title search. A title refers to multiple legal and equitable interests surrounding a given property block in the real estate market.
Additionally, a title search will check for easements, leases, or other restrictions that may cause problems for future owners. If there are any questions about property lines, the title company can arrange a survey.
Title companies play a vital role in homebuying by helping to protect the interests of both buyers and sellers. These companies are responsible for issuing title insurance, which protects buyers from financial losses if there is an undiscovered problem with their property’s title.
These claims may include outstanding liens, forgeries, undisclosed heirs, other legal issues, and disputes about homeownership.
A title company may serve as an escrow agent who is a neutral third party in real estate transactions. The title company can also ensure that any required documents are prepared and signed.
They also provide other services such as ordering payoffs on existing loans and utilities, preparing closing statements, and disbursing funds at closing. Having an escrow agent reduces the risk of fraud by ensuring that neither party can get access to funds until the transaction is complete.
Title companies manage a real estate transaction according to the agreement between the parties and state & local laws. They also facilitate all signing of necessary closing documents and disbursing funds among parties to the transaction.
It’s not surprising that most people aren’t familiar with the purpose of a title company or why we need them to establish homeownership. However, it is critical for us to understand their role in the home buying process, as buying a home comes with more than its fair share of risks.
Ultimately, we buy an asset (the house) from someone else that we don’t know, and we need someone to be a neutral third party in the transaction to help the integrity of the process – and title companies do precisely this.
Whether you are in the process of buying or selling a home, our team at Title Group is here to help. We are a full-service firm in Knoxville with expertise in Knox, Sevier, Loudon, Blount, Jefferson, and surrounding counties.
Trust our local experts to make the process hassle-free. Contact us today or click here!
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