|Responsibilities to Buyers, Sellers, and Lenders in Real Estate SettlementsThe licensed closing agents at Lawyers Advantage Title Group are responsible for determining whether the title to your new home is good and marketable, whether any liens exist against the property which will have to be paid off at closing and for conducting the closing (including preparation of the closing statement, payment of mortgages and liens, government charges and other expenses, disbursement of all funds, and the preparation, execution, and recording of all necessary documents). “Marketable title” is defined as one which is insurable by a reputable title insurance company.
What is Title Insurance?
When you buy real estate, you can see what you’re buying, right? there’s the land, the building, the landscaping. Possibly the waterfront, or the mountain view, if it’s a second home. Or the traffic and other factors that contribute to success if it’s a commercial site.
But there’s one important thing you can’t see: the title to the land. You can’t see the names of the person, persons, bank, or corporation that owns or has a financial interest in the land and the buildings. So you can’t be sure of the title.
Surprisingly, the quality of any title is not an absolute thing. Its’s a matter of opinion, where even experts thoroughly versed in the law of real estate may differ. So anyone who review your title might make an honest mistake.
Once you have successfully found the home you want, and have signed a sales contract to buy that home, you are ready to consider how the closing of the transaction will take place.
What Does the Closing Agent Do?
- Title Search. In order to insure that the current owner has good title to the property being sold, a title search and examination is made of the public records. The search will uncover all liens, encumbrances, covenants, easements, rights-of-way, and similar matters which affect the property. Title problems or potential problems are identified, and are resolved by the agent as part of their service to the buyer.
- Title Insurance. Lenders require title insurance on their loans to protect against the loss of their security due to a defect in your title to the property. Even the most thorough title search will not reveal forged signatures or misfiled or mis-indexed documents. The closing agent will determine if the property can be insured against such risks and will issue the lender’s policy. The lender’s policy only protects the lender’s interest. It does not protect the buyers. That is why you need an Owner’s Policy, which can be issued at the same time as the loan policy for a nominal one-time fee.
- Survey. Lenders usually require that the property be surveyed. The title company orders the survey and makes sure that it is completed prior to closing. At Lawyers Advantage, we hire only experienced, reputable surveyors, who provide surveys to our clients at a very reasonable charge.
- Lender Documents. The title company will coordinate efforts with your lender to insure that everything required by the lender is provided timely and that the loan documents are ready on the closing day. The loan papers are reviewed by the agent for consistency and accuracy prior to the closing. The agent prepares a closing statement to reflect charges and disbursements involved in the transaction.
- Preparation of the new Deed. The agent prepares the deed which transfers the title of the property from the seller to you, as well as any other legal papers which are necessary to complete the transaction according to local and state laws.
- Closing. The agent will guide the parties through the settlement process, accounting for each credit and charge on the closing statement, and explaining the papers which need to be signed.
- After Closing. The title company records the deed and deed of trust in the public land records; funds are disbursed; the liens (old mortgages) on the property are paid off and released from the land records so that they do not show up as liens on your property. Title Policies are issued to the Lender and the Owner, and the Original Deed to the property is returned to the new owners after it has been recorded.