Title companies are known to play a good number of key roles in a real estate transaction. A title company has a general role of acting as the agent of the insurance company, the buyer, the seller, and other parties involved in the transaction such as mortgage lenders. A title company is there to ensure whether the title to a real estate property is legitimate in order to issue title insurance for the property. The title insurance is there for the protection of the lender and/or the owner of the property from claims or lawsuits against the property resulting from dispute over the title.

Every potential home buyer should clearly understand the functions of a title company. Like I said before, a title company determines the validity of a property’s title so the buyer can be confident of the ownership once he/she makes the purchase of the property, how is that possible? The title company will carry out a title research on the property, this is a thorough examination of every record attached to the property to ensure that the buyer of the property is 100% sure of ownership. This gives a legal assurance and no one can claim full or partial ownership of the property.

During the title search, the title company takes into consideration any outstanding mortgages, judgments, liens and unpaid taxes associated with the property and any other restrictions, leases, easements or related issues that could impact ownership. Title companies sometimes would consider a property survey, this is used to determine the true boundaries of the plot of land containing the home. This is as well to determine whether there are any violations on the property by neighbours or any easement that could impact ownership.

Before title insurance is provided by a title company, an abstract title is provided in the form of a short summary including what they found during the title search. Most often, this is the history of property ownership. The title company will then offer a title opinion letter, this is normally a legal document including the validity of the property title.

Once the property title is found to be valid, the title company will issue a title insurance policy, this policy protects lenders or buyers against legal fees or claims that may arise from a dispute over ownership of the property.

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