A residential real estate transaction is relatively complex. It involves more than just the buyer and the seller. There are a variety of professionals from agents and lawyers to appraisers and mortgage brokers who play a role.
Title companies perform multiple services during residential real estate transactions. Their main role is to review the title history for a property and help resolve any blemishes on the title. Then, the title company issues title insurance policies that protect the buyer and the lender financing the transaction.
Title companies may also facilitate a closing by holding funds deposited by the buyer, distributing mortgage funds and even issuing the documents signed at the closing table. Can buyers preparing for a real estate transaction trust a title company?
Buyers have a protected right to choose
Many buyers don’t understand residential real estate closings and might make mistakes due to a lack of information. For example, buyers often give up their legal right to choose their own title company. They let the real estate agent representing them make the choice on their behalf.
The unfortunate reality about title matters is that what is a life-changing transaction for a buyer is just one of dozens of title policies handled on any given day by the title company. Mistakes and oversight are more common than people realize. Giving total trust to a title company can be a mistake that leads to closing complications or financial losses for a buyer.
Legal representation can make a major difference
Many real estate buyers do not acquire the representation of a lawyer because they already have an agent representing them. However, a lawyer serves a vastly different purpose during a real estate transaction and can be a better advocate for a buyer.
Lawyers can help with the title search process or can review the information uncovered by the title company. They can also help go over the closing documents and settlement statement to check for errors. When there are issues that require correction, such as mistakes regarding the wire transfer of mortgage funds, the lawyer representing the buyer can help resolve those issues by acting on behalf of their clients.
Securing legal representation early in a residential real estate transaction process can help a buyer feel more comfortable about the level of trust they have to place in the title company facilitating the closing. Buyers who learn more about their rights and the role of a title company may be able to identify warning signs of issues that could affect their transaction.