For most people, buying or selling a home is the largest financial endeavor they will ever undertake. For this reason, you will need to secure the professional services of a title company to efficiently and accurately handle this complex transaction.
The title company will perform what is called an "abstract of title", which means searching the real estate records in the county where that piece of property is located. The abstract will determine the legal owner of the property; reveal any mortgages, liens, judgments, or unpaid taxes that will have to be satisfied before the property is conveyed; and detail any existing easements, restrictions, or leases that affect the property.
Upon the completion of the abstract, the title company will issue a "title opinion letter", or if a title insurance policy is to be issued on the property, the company will prepare a "commitment of title insurance" to the lender and/or to the prospective buyer. This title opinion letter and the title insurance commitment will set forth all things that need to be completed and any problems that need to be corrected before the purchaser can receive a "good title". At this point, the title insurance company will complete all the necessary documents and will undertake to correct any problems found in their search. Once issues have been corrected and matters completed, the parties are now ready for the final stage and exchange of paperwork called the "closing".
At closing, the buyer/seller and lender will come together to make an exchange of documents, which will complete the real estate transaction. This process involves preparing a closing statement or what is known in the industry as a Closing Disclosure (CD). The closing statement will include the mortgage lender's charges, charges for preparing documents, the title company's fees, recording costs, and the amount of the payoffs to release any existing mortgages, pro-ration of city and county taxes, real estate commission fees, survey fees, and any other cost associated with the purchase or refinance of the real estate property.
During the closing process, the title company will collect the purchase money funds from the buyer and lender as well as the settlement costs from each party involved. The title company then uses these funds to pay all of the expenses of the transaction; pays off any existing mortgages, and pays the seller the net proceeds of the sale. All of this is done in accordance with the Closing Disclosure.
Most importantly, you will need to bring Valid Photo Identification in the form of at least one of the following: (a) Valid Driver's License or Non-Driver I.D. issued by the state, (b) Current United States or Foreign Passport (Foreign Passport must be stamped by U.S. Immigration and Naturalized Service), (c) Valid United States I.D., or (d) Valid Canadian or Mexican Driver's License issued by the Official Agency.
Also, you will need to bring your Hazard Insurance Policy (also known as Homeowner's Insurance Policy) with the lender for your transaction designated at the insured holder of the mortgage. Evidence of Hazard Insurance, including a paid receipt, must be provided prior to closing.
If you are bringing funds to close your transaction, we require Certified Funds in the form of a cashier's check, treasurer's check, certified money order, or wire transfer, payable to: PRO FORMA TITLE, INC. If you prefer to wire your funds, please contact our office for wiring instructions. If you are bringing proceeds in the form of a check from another closing, please contact us to verify the acceptance of those funds - we do not automatically accept checks from other title companies and attorneys. If you have recently closed on the sale of your house at a prior office and prefer to wire your funds to our office for your closing, please arrange for the office that closed your sale to contact our office for wiring instructions.
Homestead Property and Marital Status: At the outset of the transaction, please inform our office of your marital status. It is imperative to the transaction to know the marital status of the parties in order to determine who will be required to sign any and all documentation.
The title process can be complicated, but it doesn't have to be.