DEAR DAVE - Title Company's role in real estate transactions




DEAR DAVE - Advice for buyers and sellers	"HOUSTON'S BEST ONLINE REALTOR®"

The Title Company's Role
In Real Estate Transactions

Buying and selling a home or other real property is a significant event. It normally requires the services of a number of professionals, including a Title Company. To assure that the transaction is handled efficiently and accurately, the title company used is very important. At the time the contract is signed, you have the right to request the title company of your choice, and it is important that you understand the services they provide.
Initially, the title company will receipt the "Earnest Money Contract" and assign the transaction a number for identification. At that time, acting in a fiduciary capacity, the earnest money deposit will be placed in the title company's escrow account until the final settlement.
At that point the title company will examine and abstract the public land records to investigate the title to the property. The fact they will obtain are:

that the contract seller is the legal owner;
the presence of open mortgage, judgements, or any other type of lien which must be satisfied before "clear" title can be conveyed;
existing restrictions, easements, public utilities, etc, which may limit your rights to the use of the property, or grant rights to others who are not property owners; and
the status of property taxes and other public or private assessments

Whent this has been completed, such matters will be reflected in a "Commitment of Title Insurance", and is issued to the Mortgage Lender with copies to the purchaser, seller, Realtor(s)®, and attorney(s). This "Commitment" will set forth exceptions and matters that need to be satisfied prior to the settlement and issuance of a title policy. In most cases, the Seller will provide, at his expense, an "Owner's Title Policy" to the purchaser, unless otherwise agreed. Concurrently, the Mortgage Lender, in most cases, will require that the buyer purchase a "Mortgagee's Title Policy" for the lender's benefit. In both cases, the

policies provide financial protection against hidden defects, adverse title claims or risk to the insured.
In the time between the receipt of the contract and the final settlement, the title company will maintain close contact with the mortgage lender, Realtor(s)®, and attorney(s), to obtain the documentation necessary for closing the transaction. When the closing date and time have been set, the lender or attorney will send the closing instructions and legal documents (Warranty Deed, Deed of Trust, etc.) to the title company's "Escrow Officer". The Escrow Officer will then compile all the mortgage lender's charges, miscellaneous fees, title company fees, and other closing costs into a final Settlement Statement. At that point, the buyer will be informed of the amount of money needed to bring for the closing (in certified funds). When all of the parties have been assembled at a time they have prearranged, the papers and fees will be explained by the Escrow Officer and the papers will be reviewed and executed. The title company assumes the responsibility of collecting all funds necessary for the transfer and the prompt and accurate disbursement of such monies. After the closing has taken place, the title company will make sure that the legal documents have been filed for record, the mortgage lender's requirements have been fulfilled and all of the necessary paperwork returned to them, all outstanding liens have been fully paid, and the title policies prepared and sent out.
The Title Company plays an important role in the purchase and sale of real estate and has constant involvement from the time the contract is signed until the completion of the transfer of title. They strive to assure that this complex procedure is carried out in compliance with the instructions of all the parties involved and in the most pleasing and efficient manner possible. Service is of utmost importance.
Of course, this article is designed to give a general overview of the role of a title company, and does not answer all of the questions which could arise, or questions unique to your transaction. Feel free to contact Dave in any of the ways below with any questions or concerns you may have.

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