What Does a Title Company Do?

A title company serves as a third party that works on behalf of both the buyer and the lender in order to research and insure the title of the home that's being bought. If a home is purchased without properly investigating its title, it's possible to find out later on that the seller inherited the house only in part, and they therefore only have partial rights to sell it. The other half of the inherited house, since it belongs to someone else, puts everyone at risk if/when they show up looking for 50% of their legal property. 

Hiring a title company avoids this chaos by protecting you from any liability with title insurance; title companies are critically important parts of the closing process. 

Title Insurance

There are two kinds of title insurance policies: one for the lender and one for the buyer. Since your lender has financial interests in the property that their money will be used to purchase, title insurance protects them just as it protects you in both financial and legal terms. It's common for the seller of a home to pay for the buyer's title insurance policy and that you pay for your lender's policy. However, unlike insurance policies that require ongoing payments to keep you under coverage, you're only required to pay title insurance one time. You pay your title insurance costs when you close on the property. Title insurance covers you for as long as you own the home. 

Closing

Title companies typically manage the closing process on your new home. Typically called a “settlement,” your title company appoints a signing agent or real estate attorney to review all closing documents and finalize the title transfer and deed paperwork.

Who Holds The Title? 

Working with a title company is important to make sure that the wording on your title correctly describes who has the right to transfer ownership. The phrasing on your title may also impact how you pay property taxes and other fees if or when you go to sell your home in the future. If your name is the only one on the title, you hold the title ownership in its entirety. If you are married or live in a state with community property laws, the situation becomes more complicated. A reputable title company nearby will help you understand what's best for your situation and what your title should say. 

Title Research and Property Survey

Crescent Title conducts property surveys and title research. Some states require this in order to close on a home. Property surveys make sure that a home and any buildings on the land occupy only the spaces that are indicated as appropriate on the title. This benefits you as well; you want to know if your neighbor’s fence or any of their buildings are actually on your property.

Once the title research and property survey are complete, Crescent Title provides a title abstract report for you and your lender before the sale of the home is closed. However, your title abstract report is not your title insurance policy; they are two separate documents. 

Chain of Title Research

Reputable title companies perform thorough research on what's known as the “chain of title.” This is the complete record of the home’s ownership. A search from a local title company reveals any issues in order to stop the sale before you close on your mortgage with your lender. They also look for any possible liens so that you don't find out the hard way that you're on the hook for any work that contractors have performed in the past but didn't receive payment for from the previous owner. Finally, a chain of title also makes sure that all property taxes have been paid in full. 

Title Companies Protect Both Buyers and Sellers

Working with Crescent Title makes buying or selling a home hassle-free by removing critical risks. We’re a top-rated title company that performs all due diligence to make sure that you’re protected during the buying or selling process. Call or email us today to start the title research and property survey work needed to ensure your home purchase goes smoothly!