Title Company Information

The reference, “title company”, implies a purpose of assuring title, but the title company goes further than that. The title company actually handles the closing of the transaction by coordinating all parties-the lender, the buyer and the seller- and assembling all necessary documents and preparing, based on the contract of the parties, the settlement statement (HUD-1).

It also handles all the money involved in the closing. Through all this, the title company’s main function is to provide title insurance to the prospective buyer and any lender financing the purchase.

Title insurers differ from other kinds of insurers in that they attempt to research and “eliminate” all risks of the title defects rather than to “assume” risks. It is the ancillary function of the title company, then, to handle the actual closing to assure that the documents necessary to convey title have been properly executed and filed, and that previous interest in the property have been disposed.

 

Title insurance in the State of Texas is regulated by the Texas Department of Insurance. The title company performs four major functions described as follows:

  • Coordinate – Working with all parties, i.e., realtors, lenders, buyers, sellers & other entities of the transaction for a successful closing for all parties.

  • Cure – The search and examination of titles sufficient to prepare a commitment for title insurance and to cure any issues regarding the title to be able to close the transaction.

  • Closing – The closing of the transaction is the handling of all documents necessary to effect the transaction and disbursing the funds accordingly as escrow agent.

  • Coverage – The issuance of the title insurance policies to the buyer and any lender insuring the title as transacted.

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