You’ve probably heard that you need a title agent and title insurance when you purchase a property. But you may be wondering exactly what a title agent does. Simply stated, a title agent ensures your property has a clean title, making sure your transaction is valid, with a clear title to the property and no claims outstanding against it.
Title Search
The first step in the process is that a title agent will secure a title search on the property. Depending on the geographic area, a search can go back as far as 60 years or further. A searcher will pull all relevant information pertaining to the property which includes a chain of title, deeds, mortgages, judgements, liens, bankruptcies, easements, and any other factors affecting title to the property.
Title Examination and Clearing Title
When the title search is complete the title agent reviews all the records for the property as well as any unpaid debts. This is called “title examination” and it is the title agent’s job to determine what, if anything, affects title to the property. They do this by reviewing and uncovering such items as:
Real estate records including deeds, sales, and county land records
Bankruptcy and divorce records
Financial judgments
Mortgages attached to the property
Tax liens
Construction liens
Mineral rights to the property
A title agent looks for any information that could prevent a title from a clean transfer. The title agent looks for things like unpaid expenses from liens or taxes, as well as old mortgage loans. They look for easements, restrictions or leases that could exist. These types of expenses and issues have to be cleared in order to legally transfer a title.
Title Commitment/Binder
After the examination is complete, the title agent will produce the Title Commitment, sometimes called the Title Binder. The Title Commitment shows all defects, liens and encumbrances discovered during the search and examination. This commitment will specify requirements that need to be met, including liens that need to be paid. It will also list specific exceptions that will not be covered under the policy, including easements and restrictions that are of public record.
The Title Commitment is the “blueprint” for issuing a title insurance policy. It lays out all of the requirements needed to close on the property and lists all the “exceptions” that will not be covered.
Closing/ Escrow/ Recording
The next steps in the process after the title commitment is prepared and “title is clear” is the actual closing/settlement. In Conestoga’s geographic footprint, the title agent will conduct the closing. The title agent will also act as the escrow agent and disburse all funds. After the closing has taken place, the title agent will promptly record all documents at the courthouse.
Title Insurance Policy
The last step in the process for a title agent is to issue the final title insurance policy. After recording information is obtained, the agent will issue the Title Policy to both the Lender and Owner (Buyer).
As you can see the title agent plays a crucial role in the real estate transaction and is your best resource to protect your property rights.
Conestoga Title is Here to Help
Conestoga Title Insurance offers independent title agents the tools they need to be successful. Founded in 1973, we offer complete title insurance services through a network of highly qualified and experienced independent agents and approved attorneys. Reach out to us today!