Real Estate Closings - What Role Does My Title Company Play?
A real estate transaction can be a complex exchange involving many parties and multiple legal issues. That is why the closing itself is handled by an experienced neutral party. At Arrowhead Title we have been in business since 1984 handling all aspects of real estate closings at the Lake of the Ozarks. To us, the process is familiar, but to most of our clients, it can be intimidating. We are big believers in educating our clients, so in this week’s blog, we wanted to talk about the role a title company will play in your real estate closing.
The process will start with your title company doing a deep dive into public records to determine the history of the property in the form of a title search. This is very important and thorough research to determine things like:
-Easements or restrictions on the property
-Unpaid assessments or real estate taxes
-Outstanding mortgages or liens
-And ultimately, the seller’s legal rights to the property
If any clouds are discovered in a title search, the title company will correct things like errors in public record and resolve any issues that are correctable. Other issues may require negotiating with the parties involved or affected to arrive at some mutually agreeable solution. Doing so will allow you to proceed with your closing free and clear of any known problems. It is essential to find these issues early in the closing process because it can take time to resolve issues once they are found. Getting started early will help you avoid closing delays and post-closing issues that could leave you in the lurch.
Once the title history has been analyzed and documented, and corrections are made and issues are resolved, your title company will typically be ready to issue a title commitment. This is just what it sounds like, a commitment by the title company to issue title insurance upon the closing of the real estate transaction. Lenders will require this be in place before committing to funding the purchase. The purpose of the title insurance policy is to protect your property ownership rights in the event that any issues or discrepancies arise after closing. The thorough and accurate research conducted by your title company will help clarify any ownership disputes and resolve them quickly, completely and effectively. The types of disputes that may arise including things like errors in public records, missing or forged signatures on documents, unknown heirs or ex-spouses claiming ownership rights, etc.
The title insurance policy is good for as long as you (and your heirs) own the property or until you refinance. Your lender will require you to have a lender’s policy in place in order to close. The lender’s policy protects the ownership rights of your lender, not you. To protect YOUR interest, you will want to purchase an owner’s policy as well. Even though an owner’s policy is optional (i.e. not required), it is not something you should neglect getting as you are making one of the biggest investments in your life.
This is where all the complicated elements, and various interested parties, all come together and make the transaction happen. As you can imagine it is critical that every single detail coming up to that point is accurate, and that all paperwork is 100% correct and in order. The value of a neutral, non-biased third party who is experienced with real estate closings and the local market cannot be underestimated. Arrowhead Title is that experienced party and we act as the gatekeeper receiving all monies that will be exchanged, guaranteeing that everyone gets paid what they should, nothing more and nothing less. This is all meticulously documented so there is no doubt that all obligations have been met and ownership rights are properly transferred.
Closing day is an exciting day, but also one that can cause information overload. At Arrowhead Title we try to make that day easier for our clients not only with professionalism and experience, but also by educating our them along the way. We understand how important the transaction is to you and we are dedicated to providing the most prompt and accurate title and settlement service at the Lake of the Ozarks. If you are looking to buy a home at the Lake of the Ozarks, remember Arrowhead Title, where accuracy really does matter!