The Role Title Plays When Purchasing a Home

Girl Moving Boxes into New Home


When you buy a home, part of the process is dealing with the title company.

The purpose of the title company is to make sure the title to the home is lawfully given to the buyer. Once the title company has completed its verification, it will support that guarantee with title insurance. Title insurance protects the bank and the owner if someone were to make a claim to the property. 

The title company is sometimes responsible for handling the closing. They will manage escrow accounts where your closing costs are withheld until you close on your loan. Some of the time, the company which handles title and title insurance and the company that deals with the closing will be different.

The first thing a title company will do is perform a title search on the property. A title search looks for the following problems:

1. Current Mortgages

2. Leases

3. Existing Liens

4. Unpaid Homeowners Association Dues

5. Easements- Agreements property owners give for someone to use their property for a specific purpose. For example, someone allowing you to park on their property.

The title company will also order a survey of the property.

Surveys are almost always required. They establish that the home inhabits the space determined on the title. It will also ensure that none of your neighbor’s fences/structures are on your property. When the survey is finished, the company presents a report called a title abstract. The title abstract shows all recorded documents and transactions related to the property. This will be reviewed by the buyer and title company before closing.


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