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Understanding the Closing Process – What Does a Title Company Do?

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By : Faith Warner    99 or more times read
Buying properties does not end in meeting your perfect dream home. You will have to undergo a few more processes like making reasonable offers and getting home loan approvals. Another important process is the closing process, a time when everything related to your title ownership should be settled. If you do not know enough about this stage, you will have a hard time in finalizing the legalities of your purchase.

You can survive this stage by looking for a title company that can address all your needs for accomplishing required documents. You should be careful in selecting one because this can actually make or break the success of your transactions. You will understand this better if you have enough knowledge regarding the significant role of title companies and their skillful settlement agents.

Title searches and abstracts

The first thing that your title company does is guaranteeing that there are no other existing property claims. They should ascertain that there would be no complications in property ownership by researching the history of previous documented ownership.

After this, they start designing title abstracts. This document would contain a comprehensive history of the property in question. It would also state other complications and defects regarding property ownership. If a multiple ownership case is discovered, all the involved properties will be informed as soon as possible.

Property surveys

You can also ask for location surveys or pest inspections. They will hire a professional who can deal with such concerns and make sure that all your requests for more information are met.

In doing this, you should give them a copy of your authorization letter to permit such procedures. They would also need to consult the seller and lender about your decisions to perform such tasks. Once these are finished, you will no longer have doubts about the property you wish to purchase.

Credibility checks

They can also investigate more about your prospective seller. They would see to it that your seller has fulfilled all the requirements or selling a property. Inspecting payments for property taxes and utility bills is also their task. This would avoid having problems with title transfers. It would also ensure that you are not being held responsible for other fees that were not paid by the seller.

Legal documentation

Your title company would prepare the necessary documents that you should secure in order to complete the closing process. They would also communicate with your lender and ask them about their implemented terms and policies. Once they have acquired these important data, they would start designing your HUD-1 Settlement Form. This document contains a checklist of every payment you should accomplish, as well as the deadline for each fee.

Title insurance and escrow accounts

Some of their other obligations include preparing escrow accounts and the title insurance. The insurance will be a good way to avoid encountering problems with fraudulent ownership claims. It would secure you from undiscovered claims or hidden risks in your purchase.

Meanwhile, the escrow accounts will carry all the money that would be used in finishing the closing procedure. The title company will ensure that all of its contents are being used for expenses that are strictly related to the settlement process.

All of the previously mentioned tasks are responsibilities of a title company. Once a successful operation is completed, you will finally hold legal ownership over your dream home.

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