In real estate transactions, a title company plays several key roles. They act as an agent of the buyer, seller, insurance company, and other parties involved. They also ensure that a real estate title is legitimate before issuing a title insurance to a property.
A title company boosts buyers’ confidence by ensuring that, once bought, a property is rightfully owned by them. To verify the validity of a title, they will run a title search, which involves a thorough examination of every available record of a property to ensure that a piece of real estate is legally owned by the person or company that claims it as their own.
Along with the search, a title company will also look into liens, judgments, unpaid property taxes, outstanding mortgage, and other concerns that may impact ownership claim, including leases, restrictions, and easements.
An abstract title is prepared by the title company before a title insurance is issued. This is a short summary of the data collected during the title search. This is followed by a title opinion letter, which is a legal document that validates the title of a property.
Title companies can also act as escrow officers that hold money or documents as instructed by the parties involved and as part of a real estate transaction.