Real Estate Transactions are lengthy and very detailed. It is important when buying or selling a home that everyone does their job correctly to make the sale go smoothly. The Real Estate Agent, Mortgage Lender, home inspection, appraiser and the Title Company all have to work together and have a specific job to do. The title company does many things during the purchase/sale of a home, most importantly they ensure a “clean title” and disburse all funds.
A title company’s primary duty is to conduct an abstract search on title from many agencies including County Recorder, Federal and State Agencies, and County and City Offices. Before a buyer can take possession of a piece of property, you have to make sure that the seller has the legal right to sell the home. A title insurance policy protects from various defects such as another person claiming an ownership interest, improperly recorded, fraud, forgery, liens, encroachments, easements, unpaid taxes, and other items that are specified in the actual policy.
The title company works as a third party so neither the buyer or seller can claim the money was mismanaged or used for the wrong purposes when closing on a home. All funds are deposited into an escrow account and held until both the buyer and seller have complete all requirements in the purchase and sale of the home and agree to all terms, at which point the title company disburse all funds as agreed upon.
In short, the primary job of the title company is to protect both the buyer and seller equally as a neutral party in the transfer of Real Estate.