What You Should Know About Title Companies When Purchasing a Home: Insights from a Real Estate Agent in Lakeland, Florida
There are seemingly endless factors to consider when purchasing a new house in Lakeland, Florida — from finding the right home to negotiating the price to the final closing. One thing that’s often overlooked is the fact that you will also need to choose a title company and purchase title insurance. Of course, an expert real estate agent in Lakeland, Florida can recommend the top title companies in your area. But what are some things you should know about these title companies ahead of time? We’re going to explain below.
What Is a Title Company? And What Exactly Do They Do?
A title company, as the name suggests, is a company that issues title insurance. This insurance protects you and your mortgage lender from litigation, claims, and legal defense costs in the event of title disputes. It will also compensate you for any mortgage payments that you are unable to make if you were to lose your home due to someone else’s claim on it.
A title company conducts a “title search” before issuing insurance to ensure that the property you are looking to buy has a free and clear title. A title search looks at real estate records and reveals past sellers and buyers of the house, as well as the dates of those transactions.
When the title company has completed the title search, it will prepare a report disclosing any potential concerns that could hinder the closing process, including liens, unpaid taxes, open mortgages, unreported heirs, or other legal issues. They will share this report with your Lakeland real estate agent, who will then share it with you, the buyer.
If everything is in order, the company will sign a “commitment of title insurance” on behalf of either you or your lender. This helps you avoid a situation where you end up buying a Lakeland home that someone else has a legal claim on, or one with any unresolved outstanding issues.
Lastly, the title company underwrites a title insurance policy covering both you and your lender.
At closing, title companies can also act as escrow agents. They can explain what the closing costs are to each party involved in the transaction and prepare a closing statement. They will then collect money from both you and the seller and get all the necessary paperwork signed.
Do You Really Need a Title Insurance Policy?
Yes — if you are taking out a mortgage to fund your home purchase in Lakeland, your lender will most likely need you to buy a lender’s title insurance policy. However, even if you are not planning on taking out a mortgage, your Lakeland real estate agent will tell you it’s a good idea to buy owner’s title insurance coverage. This will protect you personally if there are any title defects down the line.
While title disputes are not particularly common, they can arise. Having a title insurance policy ensures that your investment is protected if any issues spring up.
A title insurance policy typically accounts for less than 10% of your total closing costs — and it is a one-time cost. That is not a large sum when you consider that it protects what could be the largest investment in your life.
Ready to Partner with the Most Trusted Real Estate Agent in Lakeland, Florida?
Are you looking to purchase a house in the Lakeland area? If so, and if you’re looking for the top-rated real estate agent in Lakeland Florida, contact Lisa Matheny, Realtor with the Dalton Wade Real Estate Group. Lisa is familiar with the intricacies of title insurance and can help you find a reliable title company to handle your transaction. Contact Lisa today at (863) 412-6633 or send her an email to find the right title company and save money along the way.