As a potential property buyer, you may be unclear as to what it is that title agents do?
While it is one of the main tasks of title agents to conduct the thorough title search, checking that the title of the property to be sold is free of defects or encumbrances (such as liens, unpaid tax bills, boundary disputes and the like), the role of the title agent goes far beyond just the title search. They offer the peace of mind necessary,
via title insurance, for you to feel safe buying the property and without which a lender might not judge the property a good enough investment to offer a mortgage on it.
Both sides of the transaction need such assurance. The buyer needs a clean title, one free of defects or “clouds” and the lender is staking his or hers institution’s funds on the fact that the mortgagee will have a valid lien. It is the title agent’s job to help meet the expectations of both parties.
Speed is of the essence
The work of the title agent must not only be thorough, but done quickly. Buyers want to claim their property as soon as possible and the lender wants not only to please its new customer by closing on the property swiftly, but the sooner the deal is done, the quicker the mortgage lender begins to see a return on their investment. A good title agent will discover (and help rectify) any defects regarding
the title rapidly and insure an enforceable lien to the mortgage lender in the quickest possible fashion.
After completing a course in training (and keeping current with continuing education), the title agent becomes a licensed employee of a title insurance agency, the retail arm of title insurance. The title agency processes the order for title insurance, conducts the public records search (through county and municipal sources, as well as data information storehouses, called “title
plants”, maintained by the title industry) searching for any defects in the title. These may be unpaid taxes, boundary disputes, unsatisfied contractor’s liens, the existence of a second mortgage, incomplete signatures or even fraudulent documents used somewhere in the chain of the property’s history.
Title agents also search that the proper person is listed on the title and makes certain there are no recorded judgments or assessments against the property’s title. Once satisfied that the title search is as complete as possible, the title agent creates a Binder or Commitment to insure the mortgage lender
and/or owner interest in the property. Title agencies make the decision to insure locally (as opposed to sending the application off to a centralized parent office) and are available and happy to answer any questions for prospective buyers any time throughout the process.
Types of Title Agents
A title agent may wear many different hats in a title agency:
- Title Processor –Processes the application and orders any searches.
- Title Examiner-Examines the searches of municipal, city, county and title plants to make sure that the conditions necessary to issue coverage were met.
- Escrow/Settlement Officer—As a notary, this person attends the closing, witnesses the signatures on the various documents and distributes the checks for the loan.)
- Policy Clerk-Issues the final title insurance policy.
- Sales Agent-Offers title insurance products and services to prospective property buyers.
Because of their important work, title agents help protect both buyers and lenders from any problems in the future that may arise from problems in the property’s past.
For more on the responsibilities of a title agent, visit www.alta.org.