When you buy, sell or even refinance a home, it is easy to take for granted or even misunderstand the role of your title company. Every other member of the real estate transaction seems to have a clear role: buyers buy, sellers sell, lenders loan, inspectors inspect, appraisers appraise, and of course real estate brokers broker the deal. But what do title companies do? At the end of the day, title companies pull the whole deal together.
Once you, as a buyer, have a contract or refinancing agreement in place with your lender, your title company works diligently in the background following specific directions and dates in your contract. This includes researching the history of the property ownership, safekeeping of thousands of dollars in earnest money, validating taxes, utilities, HOA fees, and preparing the necessary documents that will ultimately be recorded. All the hard work of the title company team is conducted with the ultimate goal of getting the parties to close the transaction.
However, the true value of a title company is to provide you, the buyer, with a title insurance policy. Title insurance is one of the smartest forms of protection a homeowner can obtain. The beauty to the buyer? Traditionally the seller purchases this coverage to the benefit of the buyer for the duration of a buyer's home ownership. Here are three reasons from Sean Young, a mortgage broker of New American Funding, that help clarify the benefits of your title insurance.
1. It’s The Best Protection Against Fraud: Title insurance protects the owner of a home from any claim made against their property, whether or not they are responsible. These include unpaid mortgage balances on the home, an improper foreclosure or any form of real estate fraud perpetrated by the seller. Fraud is more prevalent now than ever before and has started to gain momentum in real estate as well. Forgeries are easier to create in the electronic age and criminals take advantage of today’s ‘do-it-yourself’ attitude to sell property they don’t actually own to unsuspecting victims.
2. The Insurer Performs An Exhaustive Title Search: Countless records are now made public online, which are easy to access. But does an average buyer really know what they should be looking for? Title insurers are experts at finding anything suspicious with a home and researching exhaustively to make sure everything about the transaction is legitimate. And if it’s not, the insurance still covers the buyer for any losses incurred should a claim be made against the home. The title company will research the claim to make sure it isn’t a fraudulent one.
3. Title Insurance Is A One-Time Fee: Although it is a large fee, title insurance only needs to be paid for once and the seller pays for the policy. Unlike other insurance policies that are either monthly or annually, title insurance is a one-time fee that is acquired at the time of closing. Title insurance will protect against mortgage fraud or any unpaid mortgages the home already attached to the property.
Although title insurance is strongly recommended, it is a good idea to speak with a professional about it so that any questions you have may be answered. We have listed links to a few of our title company partners below. At Louisville Realty Associates, we appreciate all the title companies who help us succeed in our transactions. They are truly the unsung heroes of our client's real estate transactions. At LRA, we have the experience, energy and depth of knowledge to help you list your home for the best price. You can reach us anytime at firstname.lastname@example.org.