How does a title agency help?
There are many reasons for buying or selling a home without the assistance of a realtor, but one service provider you can’t complete a “for sale by owner” transaction without is the title agency. Using a title agency not only ensures that your closing goes smoothly, it also safeguards your transaction.
What Does a Title Agency Do?
A title agency’s job is to make sure the closing happens. To do this, the agency will make sure all the paperwork is in order, conduct a title search and order the reports and surveys needed to transfer property ownership.
Two of the biggest contributions of the title agency are the title search and providing title insurance.
A title search is a public records examination of the property’s title. This research determines that the property is clear of liens and is eligible for sale. The very last thing you want to do is buy a house and then find out there are liens against it, or worse, a co-owner didn’t sign off on the sale! A title search will uncover issues like these so they can be resolved before the closing.
Title insurance is required by most mortgage lenders. This insurance protects the lender (and a separate policy protects the buyer) from unforeseen defects in the title. These problems usually don’t show up in the title search, which is why this extra protection is needed. A title insurance policy means the title company will help you defend you from claims against the title. It’s a one-time fee, paid at closing and never again.
Other Services from the Title Agency
The title agency can host and facilitate the closing on neutral ground. As an impartial service provider, the agency does not work “for” the buyer over the seller, or vice versa. The title agency just wants the sale to happen, and it’s their job to make sure it does. A title agency does this by collecting all of the documentation needed from both sides, making sure it’s all filled out properly and signed. Having a second set of eyes to look over everything is especially helpful in a by-owner transaction.
The title agency files the closing paperwork with the appropriate government agencies and makes sure the buyer, seller and mortgage lenders all get copies of the closing documents.
Escrow and Notary Services:
Title agencies can also act as escrow agents, hold earnest money and disburse funds. They can also provide notary services for document completion.
The important thing to remember is that the title agency is there to help you with your by-owner transaction when you might not have any other real estate professionals assisting you and looking over the contract to make sure everything is in order.