In the real estate buying and selling process, it is important that you would be able to choose a good title company to take charge of the closing. Having a good company will enable a faster and smoother closing. Take your time in deciding the company to choose.
If you are not quite sure what to expect from a title company, here is an overview of what they do:
1. The company initially prepares the abstract of title. Although this is just an abstract, this requires many works since they have to check the locality where the property is located and check on the record. The abstract contains the legal owner of the property, and indicates if there are mortgages, unpaid taxes or liens on a property.
2. The company will release the opinion letter. They will also issue a Commitment of Title Insurance to the mortgage lender. This document will mark the start of the completion process to achieve a good title.
3. During the processing of the title, the company of the buyer will likely to send a survey company to survey the property to ensure that there are no survey issues on the property. If there are any unexplained issues on the title, a seller might be required to provide the necessary documents such as death certificates, divorce decrees, and wills among others. The title company will make sure that the buyer will get a clear title of the property.
4. After the processing of the title, the company will then set a closing time. Both buyer and seller will go to the company at the appointed time to make the closing and will provide plenty of documents to sign.
5. The HUD-1 Settle Statement will be issued by the title company. It is as form that outlines all charges and fees charged in relation to this real estate transaction.
6. The company will take care of The Deed. There are several types of deeds to use on property rights to a buyer. In a residential real estate sale, the most common is known as the General Warranty Deed.
7. A title company will ask several questions from the seller. This is called the Seller’s Affidavit. This is important to make sure that nothing has transpired after the title company did their research on the property. An example of this could be, “Have you gotten a divorce or gotten married after the contract?
8. The Title Company’s Privacy Statement tells you that the title company could release information on you and your transaction. Some of these disclosures are necessary and unavoidable, such as reporting the selling price to the county. If you are not comfortable with this, make sure to read the statement and discuss this with your title company.
9. A tax form called the IRS W9 will be provided to the IRS stating the amount a seller receives from the transaction. A buyer’s loan documents are also required by some mortgage company and require the seller to sign some loan documents.
10. The Pay Off agreement is where you acknowledge that the title company is dependent on the payoff statement being accurate and you agree to hold them harmless in case the statement of the payoff is erroneous.