Last Updated on June 7, 2023 by Luke Feldbrugge
What does a title company do for the seller? 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 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 selling side, you may be wondering what a title company does for the seller. It turns out, they actually do a lot from opening escrow to facilitating your closing day. Let’s take a look at what a title company does to help you sell your home.
Title Companies Validate Contracts
When you accept an offer on your house, you’ll sign a contract for sale that outlines all the details of the agreement 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. You can feel confident your purchase agreement is getting the legal scrutiny necessary to protect your interests.
What Does a Title Company Do? Perform Title Searches
One of a title company’s primary functions is to perform title searches on the sale of any property. The title is the document stating the right to own and use a property. This is different than a deed, which is a document to verify the 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 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. It’s also always good 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.
Assist with Lien Negotiation
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 claiming that they weren’t paid, or an undiscovered claim pops up in a divorce proceeding? These are not situations you want to handle on your own! With a title company, you get a negotiation expert who can help you resolve the issue.
What Does a Title Company Do? Title Insurance
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 to close the deal.
Open Escrow Account
During most home sales, the title company will open and maintain an escrow account to safeguard any down payment or earnest money involved in the transaction. The title company will only release the money from the account after receiving permission from both buyer and sell in writing. So, what does a title company do for seller in this case? The title company is the one protecting all of the money to be used to purchase your home.
As if they didn’t offer sellers enough services already, a title company can also typically perform notary duties. This is important as you’ll need to have a variety of documents notarized during a home sale. Using a title company with notary services saves you the time and hassle of finding a separate notary. You’ll often save a little money by using your title company’s notary as well.
What Does a Title Company Do? Closing Process
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 make sure you sign and notarize all of the final paperwork before distributing funds from escrow accounts. Here, title companies benefit sellers by simplifying the closing process, making sure the deal is legal and as painless as possible.
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