So, your settlement agent has received the title search back from the title examiner. What's next? The results of the title search are reviewed by all parties involved at the settlement agency. If the title search uncovers exceptions such as outstanding liens, easements, or property restrictions, steps are taken to address and rectify these dilemmas if necessary. This may involve obtaining lien releases, paying off outstanding debts, resolving boundary disputes, obtaining missing documents, or negotiating with third parties to remove encumbrances. One of the most important items an agent checks for is to make sure you have access to your new home. Lenders often require proof of access before approving your loan and moving forward in closing the transaction. Failure to confirm access could result in delays or complications in the purchase. Sometimes if there are access problems the underwriter may require additional adjoining property to be researched so they can ensure that access is properly established and documented.
After any necessary issues have been resolved, the lender typically requires the buyer to purchase a Loan Title Policy. Title insurance protects the policyholder's interest against any unforeseen defects in the title that were not discovered during the title search. The title insurance company will cover the costs of defending the title and any financial losses. On a Loan Title Policy, the policyholder will be the lender the loan is securing. This type of policy only protects the lender's interest, for an additional cost, the buyer may choose to purchase an Owner's Title Policy to protect them, providing additional peace of mind for the buyer. These policies cannot be issued until after the closing. To satisfy the lender and buyer the title insurance underwriter will issue what is called a Title Commitment, sometimes referred to as the Title Binder. The Title Commitment binds the title insurance company to issue the requested title insurance policies if all the requirements listed in the document are fulfilled and will also list all the exceptions found in the title search that the policy will not cover.
Once the title insurance underwriter provides the title commitment to the settlement agent and the parties are satisfied with the results of the title commitment, preparations are made for the closing table. This includes meeting any requirements the underwriter has requested, preparing all necessary documents, coordinating disclosures with the lender, and scheduling the closing date.
The closing table is where the finalization of the sale takes place. Both the buyer and seller, along with their respective representatives, gather to sign the necessary documents to secure financing for the buyer from their lender and transfer ownership of the property from the seller to the buyer. This typically includes signing the deed, loan documents, any affidavits required on the commitment, and other closing paperwork. The settlement agent oversees this process and ensures that all documents are properly executed. Once all funds are transferred and verified by the settlement agent, the seller receives the proceeds from the sale. After the closing, the deed and other relevant documents are submitted to the appropriate government office for recording. This officially documents the transfer of ownership and ensures that the buyer's ownership rights are recognized. After the documents are returned to the settlement agency, possession of the property is transferred to the buyer. This often involves handing over the keys to the property and any other relevant access devices.
In essence, the title search acts as a safeguard, ensuring that your dream of owning a home is not tarnished by unforeseen challenges. It is a critical step in the real estate transaction process and the effect it has on your purchase is immense. By addressing any issues uncovered during this process and taking the necessary steps to resolve them, you can embark on your journey to homeownership with a sense of security and peace of mind. With the hurdles cleared and the path forward illuminated, you can confidently proceed to the closing of your new home, knowing that your interests are safeguarded every step of the way.