Over 200 years ago, to buy or acquire land required a handshake, some money or maybe even livestock, and written documentation – (what we call a deed, today). Fast forward to the present and the process is so complicated that even the savviest real estate professional can get lost trying to make sense of it all. Enter the title company, who steps in with a sprinkle of technology and understanding of government regulation; turning an exhausting situation into smiles when the key lands in the buyer’s hand.
The goal of the title agent is to protect the homebuyers property rights. While each state may vary, the general consensus is to start by identifying all the players and the property being transferred. From there, a title searcher also known as an abstractor will run the names through various government data centers. This allows the abstractor to produce a title report, or abstract of title, which list deeds, mortgages, municipal or mechanic liens, judgments, public notices, easements, restrictions, and covenants.
All of the information gleaned from the title report is captured into a universally accepted document, called a title commitment. The title commitment acts as a checklist of items that are required to be paid off at or prior to closing, as well as list items that are not covered by the insurance policy being issued. The title commitment also confirms the current owner of the property, as well as others that have owned it in the past.
Once the title commitment is issued, the most memorable part of the title company process is the settlement or close of escrow, as labeled in various states. Leading up to this event is when the title company confirms the amounts on items being paid off, as well as asking all parties related to the purchase for their fees that may not be on public record, such as real estate commissions or lender fees. The title company compiles all of the figures and depending on the state will prepare all documentation for transferring property from seller to buyer.
While the process may seem straightforward and uncomplicated, the reality is that the title company is responsible for reviewing millions of bits of data and transferring millions of dollars in any given day. The risk of error far outweighs the insurance premium collected, which is why you want to work with an experienced title agent that knows how to protect your property rights without making mistakes along the way.