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You have to be able to give clear
title to your property before you transfer it to a new owner.
Title Insurance Companies research all the available records on your
house and yourself, looking for anything that may be “attached” to
the property.
Examples of this are liens, easements, judgments against you, your
spouse or anyone else on title, claims from previous owners,
incorrect deed recordings and anything else that would “cloud” the
title.
The Title Insurance Company after it has conducted the necessary
research will then issue an insurance policy for the new owner
guaranteeing clear title to the real estate.
This is an expense the seller generally pays as the title has to be
clear before recording. It’s kind of like a “warranty of
merchantability” for the house. If you have owned the house for less
than five years, you could qualify for a discount as the Title
Company doesn’t have to check as many records. This especially holds
true if you use the same Company that was used when you bought the
house, although most Companies will honor the discount anyway. What
you need to ask for in this case is a “short term rate”, usually
about a 20% discount on their standard rates.
Title Companies also handle the recording of the new deed and are
the recipients of the buyers’ loan proceeds from their lender. They
receive this money in trust when the loan is funded (usually the day
before closing) and disburse it when the deed records.
Title Companies in some States are also set up as the Closing
Agents.
ESCROW OFFICER/CLOSING AGENT:
“Escrow” could mean several things in real estate. It all depends on
where you live. |
