• McNickle & Bonner

What Does a Title Agency Do in a Real Estate Deal?

A successful real estate deal involves the active participation of popular stakeholders, such as the realtor, mortgage lender, seller, buyer, attorney, loan officer, and home inspector.


Another indispensable party in a real estate transaction is the title agency.


Although lesser-known, the title agency gives both the buyer and seller the confidence to proceed with the transaction by doing the following:



Title search

During a real estate transaction, a title search looks for potential issues that might affect property sales.


Ownership - A title search looks at relevant records to verify the current owners and ensure the seller has the authority to do so.


Liens - A title search also reveals existing liens on the property. For example, it shows that a contractor never got paid for a flooring job and will receive the money from the new owner.


Mortgages - Most homes are not owned free and clear. If there's a current mortgage on the property, it'll be paid off before the deal can go ahead.


Property survey

If a survey is required, a title agency will get a survey, which will reveal any encroachment by the neighbor on the property.


The survey also verifies that all structures are within the building and do not encroach on the neighbor's property.


Title insurance

A lot can go wrong after the finance, sales, or purchase of a property.


While a title agency will try to search and resolve every issue with a property, some, such as forgeries and filing errors, are difficult to unravel. Title insurance protects the lender and owner from any future uncertainties.


There are two kinds of title insurance; loan and owner's policy. A loan policy protects the mortgage company's interest until the loan is repaid.


Similarly, the owner's policy protects the owner from future claims that threaten the ownership of the property.


Dues, bills, and property taxes

It's the title agency's duty to verify that municipal, county, and school districts' property taxes have been paid. That's because there can be a lien on the property for unpaid taxes.


In addition, the title agency checks with the Homeowners association and utility companies to ensure all necessary payments are up to date.


The seller will settle unpaid dues and bills before the deal moves forward.



Closing and escrow

A real estate attorney reviews all the documents and supervises the transfer of title from the seller to the buyer. Sometimes, the title agency is also responsible for managing the escrow account on behalf of the seller and buyer. They facilitate the collection of payments and the distribution of payouts.


Buying or selling a property soon? You need fast and safe closing services to complete one of the biggest transactions of your life. Call us today to engage our expert real estate attorneys.