Title companies are business entities that focus on the examination of the quality of titles or deeds associated with property holdings. In many instances, the title company will also function as the means of insuring the property during the process of a sale. While the title company usually works closely with the current owner of the property, it is not unusual for the company to work directly with real estate agencies and professionals to establish the legality of title claims and thus clear the way for a sale.
When taking on an investigation of a given property, the title company first researches the claim of ownership associated with the property. This includes reviewing the current title or deed to ensure there are no defects or questionable factors in the actual construction of the documentation. Once the propriety of the title is established, the company takes steps to ensure there are no current liens on the property other than those already acknowledged by the owner. Failure to uncover this type of information can jeopardize the sale and also possibly render a title claim invalid.
When any irregularities are uncovered as part of the investigation, the title company will often work with the current owner or the selling entity to resolve the issues. Doing so helps to pave the way for an easy progression in the sale process. The company remains involved all the way through the closing process, often overseeing the funds transfers that complete the sale.
Once the title company has thoroughly established the validity of the title and identified any liens against the property, it is not unusual for the company to provide what is known as a title binder. The title binder is simply insurance that provides protection to the property during the period that is it up for sale and through the closing process once an offer has been made. The insurance offered by the company is of a temporary nature, and will only be in effect until the closing is complete and a fresh title is issued to the new owners.
