A title company coordinates the transfer of real estate from one party to another. There are many steps involved in this process. From beginning to end it goes roughly as follows:
When a lender meets with a borrower, for either a purchase or a refinance, the lender requests title, to find out what, if any, liens have been placed against the property.
In a purchase transaction, the lender will get a copy of title from the seller’s attorney.
In the case of a refinance, the lender (or broker) will order title directly from the title company.
The title company performs a title search, or abstract, pulling data from the recording body, usually the county, to determine what liens are on that property.
If there are unexpected liens, the borrower will be able to address them with the seller before closing.
A title company will often offer title insurance, which is insurance against liens being placed on the property after the search is performed, potentially causing the buyer expense at a later date.
Once the transaction is ready to go to closing, the title company will prepare closing documents and reconcile the figures from both sides of the transaction. Once both sides are in agreement, the title company receives then distributes the funds sent by the lender.
At the closing, the title company will review the documents with the borrower.
Keep in mind though that the titile company is unable to give advice or direct a borrower as to a course of action if questions arise. Borrowers should always have either an attorney or someone knowledgeable about the lending process involved.
After the closing, the title company will arrange to have the recordable documents sent to the recording body to be recorded.