The Title Company, Generally
In order to thoroughly understand any real estate transaction, one must first understand the role of the title company. The title company serves as a neutral agent for all parties of the real estate transaction, including but not limited to: the buyer, the seller, the lender, the insurance company agent.
The Title Company in Opening Title – Contract Signing & Receipt
When the real estate transaction has been negotiated and settled, the buyer and the seller sign the contract. The contract is then submitted by a party to the agreement (usually the real estate agent) to the title company along with the earnest money payment.
The Title Company in Closing – Title Insurance Commitment and the Closer
The individual that is the “middle-man” between all parties to the real estate transaction is called a closer. The closer communicates with the seller, buyer, and lender and moves the parties to the closing.
The Title Company in Escrow – Escrow Officer
As mentioned above, the title company does not represent any party, but instead, is an agent to all parties to the real estate transaction. One role the title company may play is as an escrow officer. In short, the title company will hold all documents or money that are part of the real estate transaction in accordance to the will of the parties.
The Title Company as the Insurance Issuer
The title company may also issue what is called “title insurance”. It is important to note that the company itself does not create policies nor is it liable under the policy; instead the title company sells the policy as an agent of the insurance company and receives a commission for issuing the policy.
The Title Company vs. the Real Estate Attorney
The title company and the real estate attorney are both extremely important in a successful real estate transaction. However, the roles of the title company and attorney differ. As highlighted above, the title company is an agent of all parties to the agreement, while the real estate attorney is only an agent to the client of that attorney.