If you think back to when you bought your house, you may remember working with a title company. They were the intermediary working with all parties to handle the nitty gritty details of the deal. You probably hired a title company because you wanted to make sure there were no issues with the property you were buying. But now that you’re on the other side of the equation, you may be asking, “What does a title company do for the seller?” It turns out, they actually do a lot from open escrow to facilitating your closing day. To help you prepare for the process, let’s take a look at what a title company does to help you sell your home.
When you accept an offer on your house, you’ll sign a contract for sale that outlines all the details of the agreement and any conditions that need to be met before closing. A title company works for you by reviewing and validating that contract and any supporting legal documents. Title companies employ teams of real estate attorneys who are experts in these sorts of contracts. So, if you don’t hire your own lawyer, you can still feel confident your purchase agreement is getting the legal scrutiny necessary to protect your interests.
Perform Title Searches
One of a title company’s primary functions is to perform title searches on any property being sold. Title is the right to own and use a property, not to be confused with a deed, which is a document used to verify title. Title companies search government records and other sources to see if there are any outstanding legal issues involving the property, including liens, unpaid taxes and other claims to ownership. All of these issues would have to be resolved before a sale could be completed.
While title searches certainly protect the buyer from purchasing a home full of legal complications, they also benefit sellers too. Any issue that delays the sale of the house could cost you money, and you always need to know if there are legal issues regarding your property. Although you likely had a title search done when you bought the house, it’s possible that something was missed or things have changed in the time since the search was completed. Having a title search done is not only required by most mortgage lenders, but it gives you the information you need to handle your legal obligations (if any) and close the sale.
If there is a lien against your property, a title company can help negotiate a resolution. This is a crucial benefit that title companies offer sellers because liens can be complicated and tedious legal issues. Imagine a contractor is making bogus claims that they weren’t paid, or a previously undiscovered claim to title pops up in someone’s divorce proceedings? Do those sound like situations you want to handle on your own? With a title company, you get a negotiation expert who can help you resolve the issue so you can finalize the sale.
Once there are no more outstanding issues regarding title to your home, the title company can then issue title insurance to various parties. Title insurance is basically a warranty that protects against financial losses if issues with the property’s title come up in the future. Title insurance comes in two forms, one for buyers and one for sellers. Who pays for the insurance policy depends on where you live and the terms of your purchase agreement. But in any case, title insurance can bring peace of mind to both buyers and sellers so you can move forward and close the deal.
Open Escrow Account
During most home sales, the title company will open escrow and maintain the account to safeguard any down payment or earnest money involved in the transaction. The title company will only release the money from the account if they get written permission from both the buyer and the seller. So, what does a title company do for seller? Well, in this case, the title company is the one protecting all of the money to be used to purchase your home. So you can see why it’s so important to work with a professional title company you know and trust.
As if they didn’t offer sellers enough services already, a title company can also perform notary duties. This is important as you’ll need to have a variety of documents notarized during a home sale. Contracting with a title company that also offers notary services saves you the time and hassle of finding a notary on your own. You’ll often save a little money by using your title company’s notary as well.
If you want to save money on other aspects of your home sale, check out our local deals page. Use the dropdown menu to find hero discounts in your state on everything from title companies to home inspectors.
If everything goes smoothly with the title of the property, you’ll soon find yourself at the closing table. Title companies are often the central organizers of the closing process, helping facilitate the proceedings and making sure all parties handle things correctly. At closing, a title specialist will also make sure all of the final paperwork is signed and notarized before then distributing funds from any escrow accounts. Here title companies benefit sellers by simplifying the closing process and making sure the deal gets done legally and as painlessly as possible.
Ready to sell your home but still want to know more about how it all works? Register with Homes for Heroes and you’ll be automatically matched with a real estate specialist who can answer all of your questions and save you money on your next home sale. Heroes who use our program to sell a house save an average of $2,400.