When you are referred to a title company, it can be confusing. In the midst of purchasing real estate, it can be difficult to understand and even a little annoying to have to make sure that the property you are about to spend a large amount of money on will actually be yours. That is why it is so important to understand how and why a title company does what it does. |
The first thing you should understand is what exactly a title company is. It is, essentially, a service that searches out any outstanding issues with a piece of real estate that is about to be purchased. These issues could be very serious for you as the buyer of this piece of real estate and could range from liens to inheritance issues to other, much more obscure problems. To put it simply, they are trying to make sure that you are the only person who can claim ownership of the piece of property you are purchasing. This protects both you and the lender against any lawsuits by someone claiming to be an owner of a property you are attempting to purchase. These companies also provide insurance, which provides even more protection for both you and your lender, long term, should any issues arise.
You may be interested in how, exactly, a title company determines that a property is actually available for purchase and if there are any financial issues or potential ownership disputes of the property. Initially, they will perform a thorough search of the title. This is done via careful examination of property records to make sure that the property’s seller is the rightful owner and thus is legally able to sell it. They will also search for any outstanding financial issues with the property, such as liens, outstanding mortgages, judgments, or unpaid taxes. They then check for any leases, easements, restrictions, or other issues which could also affect the ownership of the property. Some companies may also perform a property survey or ask you to have one performed. This is done to determine the actual boundaries of the plot of land the house occupies, to make sure the house actually sits within these boundaries, to check if there are any encroachments onto the property from neighboring properties. All of these issues can also affect a claim to property.
Once the title company has completed their search for any issues that could affect your ownership of the property, they will prepare an abstract, which is simply a brief history of the property’s ownership and any issues that were found. They will then issue a letter that certifies that you are the rightful titleholder.
When looking for a Title company, Ann Arbor home buyers rely on Liberty Title. Learn more at http://www.libertytitle.com/.
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