THE CLOSING PROCESS
A title company protects those involved in the transaction of buying or selling property—the buyer, seller, lender, real-estate professional—we ensure that all requirements for a seamless closing and clear title are met. Even if you are refinancing your existing mortgage, your financing provider typically requires you to seek out a title company very early in the process. The title company is one of the most important parties you will work with during your transaction. A title company offers three vital services:
- Research the History of the Property’s Title
Also known as Abstracting, the title company begins researching the history of the property’s title. Once completed, a Commitment will be issued that displays all the past property owners as well as requirements and exceptions to transfer clear title to the property. Ideally, the Commitment would exhibit a clean line of ownership that begins with the very first owner and ends with the current owner. In the event research reveals issues in the current ownership, disputes, or liens against the property, curative work would be required to “clear title.”
- Coordinate the Closing Process
The title company also coordinates all facets of the closing. This include preparing the necessary title documents for closing, researching current payoff information, composing the Closing Disclosure Form (CDF) and/or ALTA Settlement Statement. The CDF and/or ALTA presents a breakdown of all costs associated with closing, such as lender fees, title fees, flood and hazard insurance fees, real estate fees, taxes, escrows, payoffs, endorsements, and other miscellaneous fees. The title company will execute all financial disbursements related to the closing, which includes sending wires and preparing checks for those whose services were rendered during the transaction. At closing, the Escrow Officer provides explanations of all documents to the parties involved before signing commences. Outstanding fees, premiums, commissions, existing mortgages, liens, and judgments are collected for and paid and/or disbursed accordingly. Finally, the mortgage/Deed of Trust and new title Deed are filed with the county clerk.
- Issuance of Title Insurance
The final service provided by the title company is the preparation of a title insurance policy for the lender and/or the buyer. The title insurance offers protection to the lender and/or buyer from financial liability should a dispute over ownership or a lien present itself in the future. Disputes as such can become costly and potentially result in loss of the property’s ownership from the buyer. In accordance with the coverage, title insurance will relieve the buyer from these costs and any loss if it should occur.