What Does a Title Company Do During Closing?
When it comes to real estate purchases, buyers and seller’s agents tend to get the most attention. But, here at True Concept Title, we know that the title company is often the unsung hero of the transaction. The title company works behind the scenes to keep the property purchase on track.
The title company has a lot of responsibilities that relate to the closing. Our job begins after the buyer and seller sign their sales contract, and it doesn’t end until after the property sale completes and you get the new keys. To help buyers, investors, and partners like mortgage agents understand the closing process better, we explain what you can expect your chosen title company to do.
Title Search
The title company’s first job is to research the property’s history of ownership, chain of title, and to identify encumbrances on the title. Some examples of this would be a mortgage, a tax lien, or an easement.
If the title search finds any of these potential issues, the title company works to clear them. The title company puts all of its findings together in a report called an abstract of title.
The fact is – the title company is a major part of any real estate sale. We are highly involved in the paperwork needed to make everything official. Accuracy is what’s most important to us above all.
Title Insurance
The title company issues title insurance. This guarantees the title is free from encumbrances. The buyer has to buy enough title insurance to protect the lender against any loss due to encumbrance on the title.
Closing Documents
Closing day can be summarized as two separate transactions: the home purchase and the mortgage loan. These transactions have many documents associated with them. These documents include the deed, the mortgage and promissory note, insurance policies, and disclosures.
It is the responsibility of the title company to prepare each of these documents and obtain the required signatures.
The title company issues title insurance guaranteeing the title is free from encumbrances. For a smooth sale, new home purchase, or mortgage refinancing, it is essential to choose a title company that you can trust.
Escrow Payments
Property tax and insurance are fees that buyers prepay at closing. The title company collects these fees and deposits them in a special escrow account for disbursement to the correct companies and taxing authorities.
Cash Disbursements
During a real estate closing, a lot of money changes hands. The buyer pays a down payment, insurance premiums, and property tax. The lender then pays the seller the amount due after the down payment. The seller then repays the balance on their mortgage in addition to any additional property tax they may owe and to their broker’s commission. Then, part of that commission goes to the buyer’s broker.
The title company and anyone else involved in the sale also need to be paid. The title company figures out how the money is disbursed, records it on a HUD-1 statement, prepares checks, and then disburses the funds to the correct parties.
Deed and Mortgage Recording
Once the closing ends, the title company records the deed and mortgage. This is the step that makes the sale public record to serve as evidence of the property’s ownership.
You Have a Choice, Choose True Concept Title
The fact is – the title company is a major part of any real estate sale. They touch the money and the paperwork needed to make everything official. For a smooth sale, new home purchase, or mortgage refinancing, it is essential to choose a title company that you can trust.
Consider us for your next real estate purchase. True Concept Title works hard to be the best in the business. Our national title specialist will work diligently to make your property purchase as painless as possible. Accuracy is what’s most important to us above all. Contact us to learn more today.
