Title companies provide an important service during the final stages, including protection for both sides of the deal. So what is this protection that title companies are offering? If you’re the buyer, the title company will guarantee that the house or property you are purchasing has clear title, a short way of saying that there are no outstanding liens or other problems with the title. If an issue with title is found, then the title company will be responsible for clearing the title and providing the new owner with clean title, or else the contract may be canceled by the buyer.

Furthermore, the title company labors to come up with additionally required information to obtain public covenants, reports, conditions, as well as any restrictions for the community involved, and to get them over to the purchaser for consideration. On behalf of both the buyer and the seller, they take care of all signatures involved. The lending institution will simply dispatch the various loan documents over to the title company, who will first sit down the seller to sign off on the transaction, and next will sit down the buyer to sign all of the loan documentation along with the various title documents.

Placing the house in the buyer’s name and actually liquidating the existing loan before attaching the new loan to the property, after all parties have finished signing, the loan documents are sent back over to the loan officers for funding of the loan, and finally all of the paperwork returns to the title company one last time so that they are able to send the documents out to be recorded, as this finalizes the transaction. After the house has finally been recorded and closed out, the title company will collect the buyers funds for down payments as well as closing costs then hand over the transaction proceeds to the seller of the house.

The current drop in home sales has affected title companies as well, with many either closing down or reducing staff, but this is to be expected in the current housing market. Your best option is to find a title company that has been in business for a fairly long time. In most home sales, the buyer selects the title company but if you’re buying a house owned by a bank, then the bank will probably require that you use a particular title company.

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