When buying or selling a home there’s a lot that can go right and as long as you have the right people working for you that’s exactly what should happen! If you are buying or selling a home in the Locust Grove area and need a recommendation for a settlement company let me know and I’ll be glad to assist.

Once you found your home and are under contract you might wonder what’s my next step? This is where the title company, also known as a settlement company, but could also be a real estate attorney, steps in to work on a few things behind the scenes on your behalf.

Handle and hold your EMD
As you know in real estate there are a lot of acronyms and you might be wondering what EMD stands for. It stands for earnest money deposit. It’s the good-faith money that you put forward to let the seller know that you have ” skin in the game” it’s money that the seller could use if you default on the contract.

It’s important that these funds are held by a neutral third party and the title company is perfect for this. This way you can have full confidence that there is no commingling of funds.

Research Property Ownership
The second thing that the title company does is look at the chain of ownership from the beginning of recorded time for the property up until the current owner. It’s important that as the property has changed hands over the years that it’s done so correctly and each transfer is reflected in the deed accurately.

Also want to make sure that there have been no typographical errors with the previous owner’s name. They’re also checking to make sure that the size of the property has not changed as it’s been bought and sold.

Check for outstanding liens
After the ownership has been researched, they move on to checking for various types of liens that may have been placed on the property. There are various types of liens that the title company May uncover such as a mortgage, a mechanic’s lien, there could also be tax liens, or liens from unpaid HOA fees.

Liens are called clouds and the Title Company will work diligently to get these clouds removed from title so that when you take ownership of the property you are taking ownership free and clear. So, for example, if there is a mortgage they will order the payoff so that they know how much of the seller’s proceeds need to be sent to the bank.

Issue Title Insurance
When the title company has full confidence that they are no liens on the property and you are able to take ownership of is your new home free and clear they will issue title insurance. There are two types of title insurance one for the owner and one for the lender. You will be required to purchase title insurance on the lender’s behalf. Owner’s title insurance is optional.

While owner’s title insurance is optional you may need to consider a few things if you were thinking about not getting title insurance. It’s a claim of ownership ever arose you would need to hire a real estate attorney in most situations to represent you in court. If you purchased owner’s title insurance then the insurance policy would pay on your behalf for your legal fees. Your insurance policy would also cover you if there was a loss of utility or if you were forced to sell the property. For the small amount extra that owners insurance costs most in the real estate industry recommend it.

Prepare Closing Documents
The last thing that a title company does for you is they handle all the closing documents. On the day of closing you will meet at the title company and your settlement agent will have a stack of papers that they will go through with you. Their important job is to explain what each one is, be there to answer any questions, and to make sure you sign in the correct places.

When complete they will provide you with copies either electronically or in paper format. And also know that they keep records if you ever need those documents in the future. Their final responsibility is to coordinate with the other title company and make sure that all the needed documents get to the lender and to the courthouse so they can be recorded. Once the final documents are recorded legal ownership change is complete.