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What is a title company and its role in real estate market

Knowing what a Title Company is is of great value if you are a real estate investor. It is a kind of real estate registry office. 

Basically, the job of a Title Company is to analyze the documents of a property to make sure that they are legitimate and that there is nothing wrong with them, bringing security to the buying and selling operation. 

In addition, Title Companies also issue property insurance, protecting the parties from possible future lawsuits or property claims.

Title Companies can provide extra security during the closing of the deal as they can also keep so-called Escrow Accounts, which are deposit accounts or guarantee accounts where all the amounts needed to conduct the deal remain.

In the closing (the most expected day in a negotiation, because that is when the title is transferred), a Title Company settlement agent will show all the documentation and make the necessary explanations as well as charge the costs of the transfer services and will also distribute the amounts to the seller.

In this manner, the Escrow Account plays an important role as it brings an extra layer of security to the transaction. The buyer’s money is only released to the seller after all document analysis completed by Title Company.

What is the form used by Title Company to ensure full legality of a negotiation?

What is a title company

Well, as we have seen, Title Company’s job is to make sure that the title to the property being sold is legitimate. But, what is the form used by Title Company to ensure full legality of a negotiation? Let me show you!

So, to ensure that the title is valid, a detailed search of the property records is made first to certify that the person or company selling is in fact the real owner of the property. 

Thus, Title Company also seeks to identify if there are any mortgages, liens, pending taxes, restrictions of any kind, concessions or any other problem that could compromise the property.

Occasionally, a Title Company may also require a search of the property boundaries, whether there are trespasses, easements or any other situation that might create chances for someone to claim the property in the future.

In summary, Title Company’s action fronts are the following:

  • Title search – with the owner’s deed
  • Municipal lien – with the City Hall
  • Condominium – in case the property is part of some association

Then, after that, such company provides the payment of all debts and offers to the buyer what is called a “clean” title, because everything is paid.

Some places use an Escrow Company to do the closing, others use the Attorneys or most use Title Companies. At the end of the day they all have the same function that is to help the seller transfer the deed to the buyer.

Therefore, Title Company allows the buyer to be sure that once the acquisition process is completed, he is the legitimate owner of the property. 

But, even if after all this search and realization of the business, something alienated appears, that is, something unexpected happens after the purchase?

Well that’s what we’re going to talk about now. Come and see!

What happens after the title is considered legitimate?

Once all the analyses have been done and the title is considered legitimate, then the Title Company can issue the so-called Title Insurance, which is property insurance. 

This insurance will protect the buyer against future claims on the property, or even taxes and fees that may be claimed.

Suppose the new owner is surprised by someone claiming to be the rightful owner of the property. 

If in fact the person claiming is correct, the property insurance will be able to return to the buyer the value of the property.

In case of any problem, the property must be returned.

Besides the property insurance there is also an insurance that protects the institution that granted the financing of the property.

In this situation, taking into consideration the same example above, where someone comes forward claiming the property, the bank is then protected by this insurance and can be refunded of the amounts loaned for payment of the installments up to now.

Before issuing the insurance, the Title Company prepares a kind of certificate, with a summary of everything that was found in the surveys and then issues an opinion on the legality of the title.

How to choose a title company?

Once you understand what a Title Company is, naturally you will need to know where to find one you can trust.

Thus, the person who will know how to recommend the best Title Company in your area is:

-The real estate agent who is helping you in the process of buying or selling the property.

In addition, you can ask the people who have recently done business or even the bank for which you made the loan (if that is the case).

The points to watch to choose a good Title Company is to check how many years it has been in the market.

Furthermore, is important to check the comments from clients and the offering of excellent Titles Insurances.

This way, you will make sure that the negotiation takes place in the safest and most honest way possible.

Especially if you work as a wholesaler it is vital that you find a Title company that will help you throughout the process.

Otherwise your business may go down the rain.

In summary here the check list for you to use when choosing a Title Company:

  • Good delivery time: after all, delivering work on time is excellent for your reputation with wholesaler;
  • Positive Comments – whether on Google, your friends or social media;
  • Good communication – that is, how quickly Title Agents respond to your demands;
  • Experience and turnover;
  • Location – this is one of the most important points, since you (especially if you are a wholesaler) will often have to go to Title Company to sign documents

How much does a title company charge?

Now that we know how important Title Company is to the real estate market and also how to find reliable companies in this sector, the time has come to answer the question: How much does a title company charge?

To start with, I’ll give you some good news:

You only pay Title Insurance on the day of closing, that is, you don’t have any kind of recurring cost with that part.

And how much does Title Insurance cost?

Well, this is quite variable and each state of its prices. 

However, the insurance values usually stay, for a property of 100,000 dollars between 175 and 900 dollars. It’s a big range, isn’t it?

Don’t forget to check with Title Company to see if you are not entitled to any discount because in certain cases where the negotiated property has been sold in the last 5 years there is this option to reduce the insurance value.

The sum of all closing costs (without taking into account the commission value of the real estate agent that intermediated the process both for the seller and the buyer) is around 1 to 7% of the sale value. 

Obviously this value depends not only of the municipalities, but also of the states.

Conclusion 

In fact, the housing market has many parts. However, it is worth every second of time invested to understand what a Title Company is.

Especially because without these companies the negotiation of real estate would be much more unstable and would not happen with such security.

In addition to being an excellent intermediary within the real estate market, wholesalers-friendly Title Companies make life very easy for these stakeholders.

Thus, it is clear that Closing Companies are fantastic for the market in general, contributing to it generating more wealth and work within the real estate market. The best thing is that these companies contribute to everything being done in an ethical, noble and responsible way (exactly what we at Br Capital USA prioritize).

In short, we saw here in this post that these companies check numerous points before the closing day. 

For example, it is assessed whether the person actually wanting to sell the property is in fact the owner.

Title Company thoroughly checks if there is any debt, be it in relation to the electricity bill, water, condominium or other type of lien.

This process is even safer due to Title Insurance, which provides both those who buy and those who sell all the security in case something unforeseen happens.

Be it someone claiming ownership, be it a problem with financing (if that is the case).

After a few days of “closing” the buyer receives from Title Company the warranty deed that will finally formalize the name of the new owner.

Thus, the deed warranty will be received both by mail and by email, which can be accessed by anyone, as it appears on the county’s own website.

Surely Title Company makes your deal much more practical!

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