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Role of the Title Company

During the course of every purchase, a title company performs a search to
make sure the title (i.e. house ownership) is clear of any defects, such as
judgments or liens against the house. The search is usually ordered by the
buyer’s attorney, who chooses the title company.
Sometimes a title search will reveal that there is an outstanding court
judgment or other impediment that the seller must address before sale,
and the lawyers and title company will work together to “clear the cloud,” or
address the issue that is blocking the clear transfer of the title.

Once any issues have been resolved, the title company will issue a title
policy. Title insurance protects the parties in the sale from any damage that
could result from any previous erroneous or illegal title transfers, such as in
cases where the title company overlooked documents, documents were filed
incorrectly with the authorities, or previously unknown heirs have stepped
forward.
Title insurance is paid for by the buyer in a one-time premium, payable at
closing. The title company sends the policy to the buyer’s attorney, who will
then deliver it to the buyer.
The costs of the title company’s services are regulated by the government,
therefore there is little difference in price between title companies. Your
lawyer will usually recommend a title company that has proven to have
good customer service. Any kickback or incentive to acquire a client’s
business is illegal.

2020 Lakewood Home Buyer’s Guide | 89