Should You Hire A Title Company When Buying Property Directly From An Owner?
The Importance Of Hiring A Title CompanyMost real estate transactions are completed with the assistance of a title company. The buyer and/or seller will normally hire a title company to help move the transaction along smoothly and provide title insurance. A title company works as a third-party in the real estate transaction, handling most of the paperwork involved with the home purchase and sale.
Hiring a title company is crucial for several reasons:
- To provide title insurance – To help ensure that the buyer purchases the property without the possibility of anyone being able to come along later claiming to have interest in the property. The title company does a thorough check of the property’s title records to make sure there are no claims pending, or anything outstanding that might hinder the process or come back later to haunt the buyer and/or seller. Anything found during the search is paid off before the transaction is complete.
- The title company helps to make sure that all facets of the property transaction go through smoothly and correctly. They check to be sure there are no outstanding taxes, liens or claims against the property or owner so the sale transaction goes seamlessly, with no unpleasant surprises.
- One of the functions of the title company is to provide escrow services – Crucial especially for the seller, to be sure the mortgage is totally paid off and that all exchanges of funds are accomplished before the buyer takes over ownership and possession of the property. The title company handles all money, so the buyer does not have to give the deposit or other money directly to the seller. The title company holds the deposit until the property closing, when funds are then exchanged to complete the transaction.
- The title company will handle the closing and preparation of all the title/transfer documents – This includes not only the financial aspects of the sale, but also being sure that any deeds or documents to clear title are recorded and executed correctly so they will be legal.