Why Do I Need a Title Company?
A title company is more than just a place to close your property. They are the research company for the buyers, sellers or both in a transaction. We will talk about title companies in the general aspect, as each state can be a little different when it comes to how your property is closed and who is part of the process. You will want to call a local title company or real estate lawyer to find out how your state works. You can also call Inked Title, LLC at 248-617-0004 or e-mail them at firstname.lastname@example.org and their staff can find out what the process for your state on real estate closings and title.
WHAT IS TITLE?
In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership.
HOW DO YOU KNOW THE OWNER IS THE OWNER?
To find out who owns the bundle of rights and ownership the title company will do a title search. A title search is an examination of public records to determine and confirm a property’s legal ownership and find out what claims or liens are on the property. A clean title is required for any real estate transaction to go through properly.
The way to look at title is like a credit report. The cleaner the better. If the credit report is bad or has bad information it can cause issues, just like clouded title. It is always a good idea to make sure when you sell or when you buy, the title to the property is ready to be conveyed.
As the title company is reviewing who owns the property, they will also be checking on the status of the property taxes, any special assessments attached to the property, any liens someone has placed on the property, outstanding mortgages, HOA liens or if there is an HOA, so that they can get a full idea of what will be required to be paid off in the closing and what information they may need to collect from the parties involved.
When research is complete, the title company provides a report called a “title abstract.” You should get a copy of this before you close on the home to review. This document is not your title insurance policy. That is a separate document you’ll get from your agent.
WHAT IS A TITLE INSURANCE POLICY?
Title insurance is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property. The most common type of title insurance is lender’s title insurance, which the borrower purchases to protect the lender. The other type is owner’s title insurance, which is often paid for by the seller to protect the buyer’s equity in the property (Again, this differs state by state).
Once all the title documents are set and the lender and title company have compared and approved all the numbers, the title company will help in the process of closing the home (once again, who closes and who is involved will vary from state to state). The closing will also vary on if the home is a cash deal or one with a lender involved. The closer will go through all the docs that they have prepared, and the lender has provided to give you a full understanding of what you are signing and why. They will also go back over the numbers within the documents to make sure they are the same as you have reviewed and approved with your lender.
The closing table is fun and stressful. You will want to review as much of the information before closing. Most title companies will provide a digital link to all the documents for review well enough in advance to review. ASK ALL THE QUESTIONS YOU WANT AT THE CLOSING!!!! Many people SIGN SIGN SIGN and then have questions after closing when it is too late. Take your time at the closing, get all your questions answered and leave excited, not worried.
The title company also assists in the funding of the transaction. Money from the lender and the buyer are provided to the title company who verifies all the money and then disperses to all the parties who are due money – and there are many in a real estate deal.
A title company is a valuable resource. They are more than the people who sign documents. They are the companies that ensure your property is free to transfer and both the buyer and seller are secure of any issues with title through the insurance.
If you are thinking of buying or selling real estate and would like to talk further about title company needs, please call Gary Brincat or Scott Fader at 248-617-0004 or email them at email@example.com
Scott Fader and Gary Brincat
Inked Title, LLC
Inked Title is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers of real estate with Mitten Realty Group (www.MittenRealtyGroup.com or 248-294-7850) and owners of Inked Title. They have been working in real estate as brokers, Realtors, investors, property managers and real estate and title company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.