Once you have a fully executed contract for the sale of a house, the next step will be the creation of an escrow account with a title company. For many buyers and sellers, title companies remain something of a mystery and they don't understand why they should be included in the procedure.

Once you have a fully executed contract for the sale of a house, the next step will be the creation of an escrow account with a title company. For many buyers and sellers, title companies remain something of a mystery and they don't understand why they should be included in the procedure.

In the middle of the transaction in order to safeguard both buyer and seller, a title company remains an essential part of this arrangement. What are we suggesting when we discuss safeguarding the two parties? Allowing you to receive your title on the property without any liens or additional types of challenges to the title, the title company will literally vouch to both parties that there is a clear title available on the property in question. Unless a title company is able to produce a clean title report, such a cloud over the deal can cause the purchaser to walk away, unless of course the title company is capable of clearing up and guaranteeing the title for the buyer.

Such a title company will furthermore strive to resolve additional details, such as obtaining public reports, conditions, covenants, and restrictions for the community itself and handing them over to the purchaser to consider. They also take care of all of the signatures for both seller and buyer. The bank will shoot over the loan documents to the title company, so that the title company is able to schedule the seller coming in to sign off on the property and to schedule the purchaser to come in to sign the loan documents and the other 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.

A vast number of such title companies have gone out of business or had to reduce the numbers of offices that they maintain in the present housing collapse, and yet consolidation is not uncommon in this type of market. So you must ensure that you are dealing with a title company which has been in business a long time. Although the purchaser typically gets to select the title company which is utilized in the transaction, when the home is owned by a bank, then the bank will often employ a single title company for all of its home sales.