Foote Title Group – What the title company’s role is in the home buying process?
What I’ve been working on recently is a little bit of direct market research. I wanted to really dig deep into other people’s thoughts about what they think title company’s role is in the home buying process. I was specifically looking to speak with some younger folks that might be looking into buying a home for the first time and find out what they understand about it all. So what I did was I reached out to several young people and met with them one-on-one.
First let me tell you that I met with young people from some just 20 years old to 30 years old and what I found was a lot of similarities. Although some of them had different understandings about different pieces of the puzzle the answer to my question that I received most frequently was “I have no idea what the closing process is and what a title company does”!
As I was having discussions with these young people and the questions and thoughts on what a closing company does were all over place and mostly not correct at all! You would probably be very surprised at all of the things that we talked about. The most stunning thing was when I was talking to my 23-year-old son, who is starting to think about buying home, I explained that I was a little concerned that the young people we know don’t really understand what a title company does and why it’s so important to choose. Once I finished sharing my concerns he very frankly said to me, “Mom I know you do something that has to with the home buying process but I really don’t know what you do. I lived with you for all of these years and I really didn’t understand exactly what you have to do with buying my home but I do know that I need you to help me! I was shocked and saddened that I hadn’t done my job in correctly even preparing my own son. So I set out to change the way I share the information I have and why what my part of the process is very important and something you must choose for yourself!
You know you get caught up in your own environment in your own situation and you think you know all the right answers until you ask somebody who actually hears your voice and wants to know what those things you’re talking about. So here’s what I thought I would talk to you about today since I now have a different perspective based on what I heard…
A title company has lots of different jobs to do to get your home closing to the closing table. They will be doing lots of things to prepare you and your home for closing but all of these things boil down to 3 specific points:
Coordinate everyone and everything for Closing
Perform the Closing for you and Settle up all of the Money
and Insure your Ownership
Heres what all of that means:
1. Coordinate everyone and everything for closing
Once you write the contract on your new home and you picked your mortgage company and started working on your loan process we grab all those pieces for you and we coordinate them all to come together smoothly and timely for you and the seller.
We order all the certifications that need to be done, order the title search, review the title search and resolve any concerns with the title, ensure all of the paperwork is properly prepared and we coordinate everyone and everything to come together correctly on the same day at the same time to finalize your closing so you can get your keys. It’s a tricky process because there are so many pieces to pull together and so many people and tasks that need to all come together at one time.
2. Perform the Closing for you and Settle up all of the Money:
The second and just as important part of our job is to handle the “escrow” or take in and settle up and pay out all of the money. Escrow is a fancy word for a protected bank account where my money is deposited and paid only for a specific purpose. It is an account unlike any other banking account that we own. The escrow account is the account we place all of the money that is taken in from each closing. This may be money from your lender, from you or from the seller if they needed to bring funds to the closing table. Out of this escrow account we are only allowed to pay out all of the bills for each item due from your closing. These fees being paid may include bills for association fees, taxes, paying off the seller’s loan or fees to the lender. In some states the escrow company is actually a different company from where the home closing takes place but in Maryland and Virginia the closing and the escrow parts are handled by the title company.
3. Insure your Ownership
We order a title search which researches the previous ownership or title of the property. Once we receive the search we review it and repair any problems or concerns that may have shown up. The title search is a search of the land records to show all of the previous owners and any mortgages, liens, judgements or agreements then may have secured by this property or owner. Our job is to review this ownership chain and resolve anything that may create and issue for you during your ownership that could cause you to have to pay for an outstanding item or cause you to lose the property completely.
Your ownership is very serious and we are ensuring that no one can come back and interfere with that ownership whatsoever. So we do our title search and research no matter if the person that you’re purchasing from has owned the property for five minutes or a hundred years. We search back 60 years to make sure that we feel confident that all of the owners have properly signed giving their interest also that anything that they owed that was secured by the property was properly released.
To recap, a title company handles coordinating the closing, handles all of the title research, repair of the title and the title (or ownership) insurance and lastly and very importantly settles up all of the money that’s taken in to make sure it gets paid to the correct place. So those three things are what a title company does and why it is so crucial to the process!
As I have said many times in the past YOU have the right to choose who takes care of your home closing and this is VERY important. Please make sure that closing company has a good reputation and has very few claims on the insurance policies they issue. If they have lots of claims it means they’re not doing the proper research and they’re not fixing problems they do or don’t find.
I’ve heard of closing companies that, even though they give you an insurance policy, they haven’t necessarily done the proper work to resolve issues that exist. These issues could be an issue for you even before you even get that owners title insurance policy. So even though you have insurance you still may have an issue that you’ve got to work to resolve and who the heck wants to do that? That’s like buying a house getting homeowners insurance and knowing that the breaker panel is probably going to explode on you at any time. Well you have insurance so it will cover you so don’t worry about it, but who wants to deal with that?
Also make sure the company you choose has a good reputation of taking good care of their customers. You want to know if you have a question or concern after the closing that they will be there ready willing and able to take care of it quickly for you.
So those are all really important reasons that it matters that you check out that title company make sure that you choose someone that is working for you. You don’t want someone knocking on your door of the home that you’ve purchased, that you fell in love with, that you’ve started to paint and decorate as your own that tells you that the house you’ve been decorating very nicely is actually theirs!