What does the title company do?
Hi, it’s Nick with Sell My San Antonio House, and if you’re selling your house or you’re buying a house, you’ve probably got a contract to sell that house. And then somebody said, “Hey, we’re going to take this over to the title company.” Well, that’s great, but who are they? What are those folks over there going to do? So the title company is going to work between your buyer and your seller. They’re going to help you facilitate the transaction and they’re going to work independently of either side to make sure everything is on the up and up. So if I’m the buyer, what are they going to do for me?
One of the big things is they’re going to make sure they’re going to check on ownership, make sure that you own the property as the seller and you can legally sell me the property. Most of the times, this is not an issue, but with things like inherited properties, when they’ve passed down from one generation to the next, or especially if they’ve passed down through multiple generations, even though the person feels that they are the rightful owner, they may not legally have the right to sell that property. But they can help you work through a lot of these issues.
They’re also going to check for any liens on the property. A typical lien would be like your mortgage. So if you have a mortgage on the house, we want to make sure that we know about the mortgage and then we get those liens paid off. There can be other things like city liens, tax liens. And then, they’re going to check for things like judgements, that those judgements can be associated with the property or the person selling the property. And then once they found everything they say, “Hey, this seller’s good to go. They legally own the property. We’ve checked for all the liens, all the judgements.”
They will issue a title policy. All the title policy really is, is just title insurance saying that, hey, we’ve checked these things as the title company, and we are selling you an insurance policy so that if we’ve made a mistake that was our fault, they didn’t really own the property. We missed some liens that we should have caught. You’re insured up to and it’s usually the purchase price of the property.
On the other side, as you’re the seller, what are they going to do? So this is a common question that I get asked. Well, when I sell it, I still have the mortgage, how do I make sure that mortgage gets paid? So when they’ll find that lien, your mortgage, and they’ll get a payoff amount from your mortgage company, and then the amount your sales price, say your sales price is $100,000, but your mortgage is $50,000. Well, they have a payoff to that mortgage company, so they will take it and they will pay that off at the end of the transaction. So the buyer, I’ll send all the money to the title company. We’ll just use $100,000 in this example, because it’s easy. So I’ll send $100,000, plus any closing costs that I’ve got to the title company.
They’ll say were there are any debts, mortgage liens, taxes. All those things will get paid out and then they will send to you your proceeds. But they also make sure that you get paid because it’ll go like this. If I’m the buyer, I send all the money to the title company, this third party that’s here. They will help us also facilitate all the documents for closing. So, we can all sign the documents. Certain documents are signed by the buyer. Certain ones are signed by the seller. Once they’re all signed, they will not record those documents, making me the legal owner as the buyer until they’re sending you the money that you’re owed based on the contract that you have in place.
So you have a third party in there that’s going to help check from the buyer side to make sure that it has clear title. They’re the legal owners. There’s no other liens or judgements associated with that property. And as the seller, they’re going to make sure that you get paid before the title to that property is recorded, usually with your county and you get paid at the same time that person becomes the owner. So they do do a few other things at the title company. And a great title company, it’s worth its weight in gold, but this gives you a big picture idea of what the title company does. I hope it helps. If we can do anything to help you, give us a call, (210) 201-6644 or find us on the website, sellmysanantoniohouse.com.