Closing on a Real Estate Transaction & Your Title Company's Role in the Process

When closing on a real estate transaction, there are a lot of steps that must be taken and processes that must be completed to ensure a smooth and timely closing. When buying a home or property, there are several parties that will be involved in the process: your real estate agent, the lender, any vendors you may need throughout the process, the inspector and/or appraiser, and of course your title company. Selecting a title company to facilitate your closing is an important part of buying property at the Lake of the Ozarks. Your title company will fill an important role in the transaction process, so it's crucial that you find a reliable, accurate company you can trust.


Most buyers have heard this advice several times. They know that selecting a good title company is important, but many homebuyers know very little about what a title company truly is or what we actually do. This week, Arrowhead Title, Inc. is here to help explain the important role we fill as a title company at the Lake of the Ozarks and to provide some insight into the basic steps of closing on a real estate transaction behind the scenes.

Starting the Process

A sales contract is signed by the buyer and seller and delivered to the closing agent, usually with a deposit check. The escrow is accepted by the escrow agent, often by written notation on the contract. The escrow agent starts the closing process by opening a title order. The file begins to be processed. Tax information, loan payoffs, survey, homeowner/maintenance fees, inspections/reports, and hazard and other insurances, as well as legal papers,  are ordered. A title search is ordered.

Title Search and Examination

When you come to your Lake of the Ozarks title company to facilitate a closing, our first step is to confirm the validity of the title in question. We will conduct a thorough title search to confirm that the sellers do, in fact, currently have legal rights to the property. We will also look for things that may limit the new owners' right to or enjoyment of the property, such as:

  • Outstanding mortgages
  • Property restrictions
  • Property easements
  • Unpaid taxes
  • Outstanding liens
  • Outstanding judgments

By uncovering these types of issues early in the process, you have a chance to address and resolve them before closing, while the sellers are still involved. If they are not addressed prior to closing, you may be financially responsible for resolving them.

Document Preparation

The closing agent reviews the new lender’s instructions and requirements, reviews instructions from other parties to the transaction, reviews legal and loan documents, assembles charges, prepares closing statements, and schedules the closing.

Issuing Title Insurance

When ownership of a title is transferred to from one party to another, a title insurance policy is issued to protect the interests of the new owner. Despite a thorough title search, issues may eventually arise that could threaten the owner's right to use and enjoy the property. Examples of these issues can include:

  • An unknown heir surfacing and claiming ownership rights to the property.
  • The seller's ex-spouse claiming that he/she did not sign off on the sale of the property.
  • Mistakes in public records.
  • The realization that one of the signatures obtained at closing was illegitimate, unauthorized, or forged.

After it is purchased for a one-time premium, an owner's title insurance policy will remain in effect for as long as you or your heirs have a vested interest in the property. The lender's title policy will protect the lender for the duration of the loan.

Closing the Transaction

The escrow or settlement agent oversees the closing of the transaction. The seller signs the deed and closing affidavit. The buyer signs the new note and mortgage. The old loan is paid off. The seller, real estate agents, attorneys and other parties present at the closing of the transaction are paid.

Serving As The Escrow Agent

On closing day, your title company will also serve as the settlement agent. Representatives from the title company will produce all the necessary documentation to finalize the closing, collect all funds from the individual parties, and distribute payments and commission checks to the appropriate parties.

Post-closing

After the signing has been completed, the escrow or settlement agent will forward payment to any prior lender and pay all parties who performed services in connection with your closing (if they have not been paid). The transaction documents are recorded in the county in which the property is located. Title insurance policies are prepared and sent to the new lender and to you. This all happens without any further actions by the buyer or seller.

Your title company should serve as a reliable, trustworthy, accurate, objective third party during the transaction process. All monies involved in the transaction process must pass through the title company before they are distributed to the appropriate parties. Since some transactions are worth literally millions of dollars, it is critical that you find a title company you can trust to ensure that every penny is properly accounted for.

Consider Arrowhead Title, Inc. Your Trusted Title Resource!

If you are buying a house or property at the Lake of the Ozarks, we hope you'll consider Arrowhead Title, Inc. to assist with your transaction. We recognize the important role we play, and we strive to earn (and keep!) our clients' trust throughout the process. Visit our website to learn more about our Lake of the Ozarks title company, or call us directly at 573-302-1950.

The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!



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750 Bagnell Dam Blvd Suite B
Lake Ozark, MO 65049

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