Congratulations! You’ve fallen in love with a home and are on the way to packing and scheduling movers. Over the next month or so, you’ll provide more information than you ever thought possible, and sign what feels like reams of documents. In between you’ll get various communications from people who play a variety of roles in this production called real estate. One of those communications will be from a person who works for the title company. If you’re not sure what a title company has to do with you buying a home, read more to find out everything you’ve ever wanted to know about title companies and real estate. Well, at least everything that can fit in a few short paragraphs – if you have more questions you can always call your real estate agent, or the person who sent you the email in the first place.
Why Am I Getting a Message from the Title Company?
Shortly after signing the real estate purchase contract, you’ll get an email or phone call from the title company regarding your preliminary closing date. The title company plays a critical role in getting you from purchase contract to receiving the keys to your new home. Their role is very much behind the scenes but without the work of title officers and examiners, there is no closing date. You may get more than one message from your title company. Always read those communications carefully. Ignoring an email from your title company could delay closing!
Why Do I Need a Title Company?
Imagine for a moment the beautiful home you’ve chosen. Can you see yourself relaxing on the pretty tiled patio? Or pulling into the roomy garage – the one with enough space for 2.5 cars? Over the years, previous owners also loved your home, putting their own personal touch in the yard and on the walls. Sometimes a previous owner leaves more than just their decorating style. Maybe they never paid a contractor or owe back taxes to the IRS. They could have left you a lien on the home, which is a big problem. A previous owner also might have left behind an heir who has a claim on the home. The title company employs specialists who comb public records looking for any information that might prevent, or at the least, delay you getting those front door keys. Of course, the title company also gathers the information about easements, leases, or other restrictions on the property. If you’re still not convinced, just ask your mortgage company. They won’t approve your loan without a clear title.
Someone Said I Have to Buy Title Insurance
Talk to your lender. Most mortgage companies require the buyer to purchase title insurance that covers the amount being borrowed. Maybe you’re a cash buyer. In that case, it’s optional unless your state has its own requirements. Check with your title company – see, one more reason you need them. If you’re feeling a little resistant to being told you need yet another insurance policy, don’t stop reading now. Just like homeowner’s insurance protects you, title insurance is also designed with your best interest in mind. Title insurance protects you from any possibility that any previous owner did not have free and clear ownership of your property. Now, it’s a remote possibility, but are you willing to risk losing everything you’ve put into this home you’re buying if in a few years, some forgotten owner pops up and tries to lay claim to your investment? Didn’t think so. Borrowers typically don’t have a choice, but if you’re paying cash, just get the policy and hope you never need to use it. Are you wondering what this has to do with everything you want to know about title companies? Title companies issue the title insurance policies. They really are essential players, aren’t they?
It’s Closing Day!
Bet you thought you’d never get to closing day, but here you are, sitting at a big table with your realtor waiting anxiously for the moment when someone hands you the keys. The title company is here too! Say, “hello” to your closer. This person sits at the head of the closing table. You and your realtor sit on one side, and the seller and their realtor sit on the other. The closer explains each process and collects the required signatures on the large pile of documents. Your closer does more than supervise signatures. If you haven’t realized it yet, buying a home is a complicated process. You won’t see most of the process because so much of it is taken care of behind the scenes. The closer ensures that all funds, including closing costs and down payments, are taken care of properly.
One final job that your title company does for you is to get all those papers you’ve just spent the last hour signing legally recorded. This includes the deed to your new home. You’re free to go home now and pick out paint colors, and garden plants. Welcome home!