When you are faced with the cost of buying a home, you may be tempted to do whatever you can to keep costs down. Thus, you might wonder if you need to even pay the fees associated with hiring a title company. As someone who is unfamiliar with making real estate transactions, you may even wonder what a title company does. In fact, they perform several important functions to make sure you make a legitimate and smooth purchase.
A title company will do research on the property you want to buy to make sure that it is clean. Clean here does not mean necessarily that the property is stolen, but even property with a legitimate owner can have problems:
1) Liens—If a property owner owes debts, his creditors can take him to court and have a lien placed on his property. What this means is that the creditor claims a stake in the sale of the home. In some cases, property liens can even transfer to the new owner after the property is old.
2) Easements—If someone has lived on or used a property for a period of time, they can gain the right to continue living or using the property whether the new owner wants to allow them to use the property or not. Easements can interfere with your plans for the property, so if there are any easements on your property, you want to know about them.
3) Restrictions—If you buy a piece of property with plans to use it for a business, you want to know if the property is zoned for commercial or for residential use, and finding such zoning restrictions may be less than straightforward.
While the above listed services are important, researching titles does not constitute the sum and total of what a title company can do for you. Title companies can also handle money that is tied up in escrow and ensure that the money in escrow is used to cover closing costs and whatever other fees it is meant to cover. Without a title company to handle the escrow, you may put yourself at the mercy of someone who is simply out to take your money and run.
While you might be able to handle the functions listed above on your own, if you are new to the process of buying real estate, you should trust a title company to do the work for you. Even if you understand the process of buying property, why invest the time, effort, and resources required to handle the functions performed by a title company, why not hire someone to do the work for you?
Contact real estate title services in your area for more information.