Who Is Involved in the Title Process

Title companies are invaluable allies in navigating the complexities of a property purchase. The title agents at your chosen title company are responsible for conducting the title search, an exhaustive examination of all public records concerning the history of the property you plan to purchase, to determine if the title is clouded by “defects.”

Such clouds or defects, such as unpaid tax bills, unsatisfied liens, or boundary disputes, can render the title uninsurable until the problem or problems are resolved. The title agents then issue a clear title and the purchase may proceed.

Title Insurance

Title companies will also offer title insurance to protect the buyer and/or the lender, should any problems with the title surface in the future, after the purchase of the property has been completed. The title company will stand with the insured, helping pay any loss or legal fees and even defending the title from any future challenges in court.

Other services

Title companies may also handle other vital procedures involved in the purchase of property, such as the preparation of closing statements (required by HUD) and Deeds of Ownership, providing escrow services (holding earnest money from the eventual buyer, mortgage payments, and distribution of the sales proceeds) and handle closing coordination (arranging not only the time and place for signing, but the transfer of ownership as well.)

Choose well

Choosing a reputable title company is crucial to a proper property transfer. Here are some things to consider when choosing a title company:

Choosing an independently owned title company (as opposed to those affiliated with your mortgage company) prevents any conflict of interest situation. A sterling reputation and solid experience are two other factors to consider when selecting a title company. Do your research and pick a company that is not only reputable, but also ethical, detail-oriented and professional. Your Realtor is usually able to recommend a title company with whom they’ve worked in the past. Speed and clarity of communication should also be considered. Delays in response or lack of clarity can slow down the purchase process.

It is best to choose a local title company if you are making a local move as the company may be more knowledgeable about the local area and their location makes meeting the title agent in person much easier. However, if you are moving across the country, be sure to choose a title company that operates nationally or one that is located in the area to which you are moving.

Fees

Ask questions about the title company’s fee structure. Fees can vary from title company to title company (beware, too, of hidden fees) and bear in mind the least expensive company is not always a bargain. When it comes to title company services, you truly do get what you pay for and you need clear, prompt, thorough service to ensure the title to your new property is free, clear and legal. Therefore the choice of a title company is a vital one, as the correct choice will save you both money and future trouble.

For more information on title companies, visit the website of the American Land Title Association (ALTA) by clicking here.

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.

Among the professionals involved in the purchase of property, one of the most important is the Title Insurance Underwriter.

The Title Insurance Underwriter works for the title company providing the title coverage for the purchase. It is his or her responsibility to conduct the extensive title search prior to the sale of the property.

The underwriter examines all public records regarding the history of the property being sold, searching for any “defect” in the title which might negatively affect the buyer. Flaws might include a boundary dispute, unresolved tax bill, unsatisfied contractor’s lien or even fraudulent documents, among many other exclusions.

Only when such defects have been resolved, is the title is considered clear (or insurable) and the Title Insurance Underwriter can create a Title Binder or a Title Commitment (intent to insure) document for the property.

Title insurance underwriters also agree to defend the owner of the title policy in court should ever the title need defense due to defects or “clouds” that were undiscovered in the initial title search but have surfaced some time in the future.

Title insurance is the only type of insurance typically underwritten by a title company at the local level (other types of insurance normally have information gathered by insurance providers and then the information is sent to a central office for underwriting) and a title insurance company with a good local reputation can prove an invaluable ally should any problem ever arise concerning the title to the property in which you have invested.

To learn more about title insurance underwriters, visit www.alta.org.