What is a Title Company?
What is a Title Company?
Ready to be educated on the world of real estate? That's what Rabbitt and Rutter bring to you in their video on title companies. Seems kinda boring I know but they are an integral part of the home buying and selling process. You want to make sure you have the authority to buy a home and the seller has the authority to sell it. That's what a title company does, however, it's a little more complicated than that.
Dave Stamm with Lighthouse Title joins Billy Rabbitt and Ron Rutter to talk about the logistics of a title company.
A title company is probably the most overlooked vendor in the transaction. These agents that work tirelessly on the history of a property can certainly go unobserved but without this process, the deal may never go through.
Title and Escrow can often be used simultaneously meaning the same company can do both jobs; holding money and progressing the transaction and completing a title search on the deed and ownership of the property.
Title companies do the heavy lifting and dig deep to make sure there are no legal issues or liens on the property that could affect the transfer of property in a negative way. These companies also create documents that related to the conveyance of title --- What? Well, we make sure that the paperwork you sign is the correct documents to transfer the title of the property from one owner to the other.
Do Title Companies Have Their Own Title Insurance? And What is Title Insurance?
Like any type of insurance, you don't need it until you need it. The goal of insurance on title, which is purchased once, is to make sure that when the title is legally and appropriately transferred to the new owner, if something happens down the road and says they have a claim against this property, or maybe they are owed money or even if the government comes in and says the property is in a zoning violation, title insurance will protect the new owner against these claims.
The goal is to make sure all this money you've just paid out to get a new property is protected and that's the idea behind title insurance. Of course, the title company puts in the work to verify as accurately as they can, that you have the right to the new property but if for some reason, something happens, the title insurance is there to protect your asset.
Title insurance can help with all types of property issues such as easement, inheritance, faulty boundary lines, or multiple owners in the past.
What's the Difference Between a Settlement Company and a Title Company?
Often used interchangeably, a settlement company handles the exchange of money between parties and witnesses the execution of documents and paperwork associated with a real estate transaction.
The title company only explores the issue of ownership or claims on the property. They handle more of the insurance aspect to protect the future owner while the settlement handles the final closing.
What's the difference between a lender's title policy and an owner's title policy?
The owner's title policy protects the owner from claims against the title and the lender's title insurance protects the lender and is typically included in the transaction paperwork. The lender doesn't want to loan money on a home that the owner may not have ownership of. This protects both parties.
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