The average person doesn’t buy more than 1 or 2 houses in their lifetime so the transaction is viewed as pretty substantial. Most homes cost ten of thousands of dollars and some are upwards of that, so you can see why banks and homeowners alike take steps to preserve the value and ensure the transfer of the property.

Title companies are charged with the task of ensuring that the title is easily and cleanly transfered from one party to the next. This is necessary to avoid litigation and preserve property integrity.

The title company makes sure any and all liens, including mechanics liens and tax liens, are taken care of before the transfer. They also confirm legal boundaries just in case there may be a discrepancy.

The title company starts playing its role as soon as the sale agreement is signed between the buyer and the seller till the time that the title is transferred from the seller to the buyer. They have to ensure compliance to the necessary real estate laws and regulations of the state in which the transaction takes place. The primary role and responsibilities of a title company is covered in the sections below

Confirming the identity of the sellers

Their main role is to establish the seller in whose name the property is registered as per the legal documents submitted with the State. The title companies find out the legal owner of the property by examining and verifying the public land record held by state.

The title is legally transferrable

The other important objective of the title company would be to ascertain the title of the property being purchased by the buyer is absolutely clear. This would mean that the property does not encumbrance or is not under lien. There is no property or any other fiscal tax or costs due by the seller to the state.

Insuring the title

The title company also sells the buyer a form of insurance protecting them against any future difficulty with the title called “title insurance”. This insurance policy takes care of any legal and administrative costs in settling any disputes involved in the title transfer. Both, the buyer and the lender purchase title insurance policies to protect their own interests.

The “Commitment of Title Insurance” is issued once the title company has certified the title of the property. All parties and participants in the transaction receive a copy.

It is in your interest to get all ownership and legal details about the property that you intend to buy. Share the responsibility with the company checking the title for your property and understand the details that they provide.