What is a Title Company?

Let’s start first by identifying what a Title Company actually is…

According to the definition of “textbook”, a Title Company is: A company that checks the property title for links,

Any problem fixed, and ease smooth property closing while making sure the purchase is processed correctly.

Now, that’s the best textbook definition I could find. However, it would probably be best if I dive into a quick story of how I used a title company to buy my first home.

What is the purpose of a title company?

When I finally decided on the house I wanted to buy, the next step was to go to my closing. After identifying all parties to the transaction, the title company conducted a title search. This is extremely important. As stated above, this is basically where the title company checks the title to the property for any liens or claims that could have an adverse effect on the actual closing.

You always want to have a “clear and clean” title before you buy a house. This means that any liens against the property, such as mechanical liens, second mortgages, back taxes, etc. are paid in full or the debt is forgiven by the bondholder. Although the links were generated by the seller and it is the seller’s responsibility to take care of them, the buyer should never purchase a home without “clear and clear” title. Once the deed is transferred from the seller to the buyer, the buyer is legally considered the owner of the home and is responsible for taking care of the first lien (mortgage), as well as any other liens against that property. There is little point in doing a title search after you buy the house.

So the good thing for me was that the title came back “free and clear”.

Then we needed to go to close. At closing we fill out tons of paperwork. There was so much that it was a bit overwhelming and sometimes hard to understand. However, the good old title company was there to answer any questions I had. While reviewing the paperwork, I made sure to ask questions about anything you do not understand. This made things a lot easier. As long as my questions were answered, I was confident and happy with my closure. A confused mind always says, “NO!” However, the title company was there to orchestrate the entire transaction.

What is title insurance and why should I get it?

Another thing a title company does is issue title insurance. According to wikipedia, title insurance protects an owner’s or lender’s financial interest in real property against loss due to title defects, liens, or other matters. It will defend against a lawsuit attacking title as insured, or indemnify the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.

This was important to my wife and me, because if the title company forgot something while doing their title search, we would have some kind of protection. When title companies dig for liens, back taxes, etc., they can go back as far as 60 years. Maybe even more, who knows… But you definitely want to work with a title company that has a stellar track record of accuracy and ease of working.

Do Investor Title Companies Work?

Title companies work with investors like me all day. However, you have to find a title company “investor friendly”. Some title companies don’t approve of some of the creative ways investors can close a deal. It has nothing to do with legality. It is completely legal for investors to use non-traditional ways to close a deal and has been practiced for years. However, some title companies only have certain policies that would cause an Investor to look elsewhere. Many investors are involved in simultaneous closings. They close the transaction with the seller and immediately afterward, they close the transaction with the buyer. Therefore, they can quickly create a win-win-win situation for everyone involved.

The purpose of an investor is to bring the buyer and seller together by providing good creative solutions to common problems. These are typically problems such as buyers who are tired of renting, have bad credit, are looking for help with a big home business, etc. Also selling Those who don’t want to pay a commission selling through Your home and selling through an agent Those who are behind on their mortgage payments, facing foreclosure, have little or no equity, are tired of being a white homeowner, disappointed in their real estate agent, job transfer, death in the family, etc. Now, the intention of the investors is to make a profit race. HOWEVER, they understand that in order for them to make a profit, they must solve the problem for both the seller and the buyer. This is a business transaction and they are again looking to create a win-win situation for everyone involved.

In conclusion…

What is the purpose of a title company? Simply put, it’s about making the closing process as smooth and painless as possible. The softer the better. I once considered doing title searches on my own, but quickly learned to leave it to the experts. You are determined if the seller, the buyer, or an investor is getting the deal closed. There is no need to do everything yourself. Let the title company help orchestrate this transaction, so it can go through with ease.

For your success,

J. Lamar Ferren

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