The Title and Title Insurance for Purchasing Your Home
A notable overlap of responsibilities for both the title company and the closing attorney is to secure a clean title to your property. The title is crucial for all buyers as it gives you a legal right to the house that you've purchased.
The Process for Completing a Title Search
The process for validating the title starts with a title search and a thorough examination of the property records. This step is essential to determine that the seller is the current owner and is legally allowed to sell you the house. The title search confirms outstanding mortgages, judgments, unpaid taxes or other issues that would profoundly impact ownership. What you don't want to end up with is a title with liens or to discover that there are other partial owners of the property. While buying a new home should be a straightforward process, not identifying and resolving these issues could culminate in legal and liability problems. Hence, the need for title insurance.
Purchasing Title Insurance
After the search is conducted on the property's title and is determined clean, the buyer will want to obtain title insurance. There are two types of title insurance involved in buying a home. One is to protect the owner and the second is to protect the lender. Various circumstances influence the need for these policies. THe type of policy you obtain will determine whether you have any protection against questions regarding your ownership of the property. The lender will almost always require the purchase of the lender policy, but there are different rules for the owner's policy. In most counties in Middle Tennessee, if you are purchasing an existing home, it will be the responsibility of the seller to pay the premium for the owner’s policy. However, if you are buying a new construction, the obligation will fall on your shoulders. Title insurance is optional if, and only if, you purchase the property with cash. Most lenders will have title insurance as a requirement for the loan. If someone were to materialize and declare themselves as the rightful owner of the property, the title insurance will protect your investment by covering the costs of the house and the remaining balance to the lender.
Working with a Title Company vs Closing Attorney
Hiring a Title Company
A title company's primary responsibility is confirming the legitimacy of a property’s title and then issuing title insurance. Title companies play a pivotal role in settling all outstanding balances with respect to the home purchase, including issues that might hamper the transferring of the title. Title companies work on behalf of many title insurers rather than the buyer or seller of the house. Their responsibilities sometimes also include obtaining a copy of a possible survey of the property. The review of the survey would confirm property lines and identify any encroachments or easements from neighbors. Failing to complete this due diligence could result in issues for the homeowner. In some instances, your title company can maintain escrow accounts to ensure the funds are used for the closing and settlement of the purchase.
Working with a Closing Attorney
The task of the closing attorney is overseeing the purchase and sale agreement in a real estate transaction. The attorney will review all documents associated with the purchase. These instruments range from deeds to settlement statements. Closing attorneys also take on the task of examining the title and overseeing the purchasing of the title insurance. A significant difference between working with a closing attorney as opposed to a title company is the breadth of involvement. A closing attorney's responsibility is multi-faceted. They can help with loan documentation and disbursement, as well as, explain deeds and notes associated with the purchase. They represent the buyer as opposed to the insurer, assisting with any legal problems or questions that might crop up during the settlement process.
Rochford Real Estate Law offers the services of both title company and closing attorney. If you are looking for trusted legal representation for buying your home, contact us today for a free consultation.