You have started the process of buying a house, now what? Whether you have gone through a realtor or you are doing a For Sale by Owner, going through a title and escrow company is a VITAL part of buying a home, vacant land, or commercial property.
But WHY? What do they do? A title company goes through an extensive search that provides a “clean title” from the Seller to the Buyer. And what does a clean title mean? That it has been washed or sanitized from COVID? No! It means that the title department has gone back as far as it can to see if there are any title defects or liens. A lien on a piece of property can range from a Deed of Trust when you purchased the property, or a Property Tax Lien placed on it if taxes aren’t paid to the correct parties.
When the order for your “Commitment for Title Insurance” is requested, the title team goes to work reviewing records and looking for any issues. From there, they provide a list of “requirements” or changes that must happen to provide a “clean” title. In other words, a title that has no issues. This Commitment will be provided to you for review as Buyer and Seller, and a better understanding of how to read that can be found here.
Once the Escrow department has met said requirements, they can then finish the process of transferring the title to the new owner. If for whatever reason, there is a problem within the title search, the escrow department when takes the appropriate steps to try and clear those within reason. And if anything is missed in the search and cleaning, that’s where Title insurance steps in to save the day.
If you have any questions, reach out to a local Pioneer Team to ask away!