Title companies are organizations that identify liens and problems with this important document, to make property closures as smooth as possible, while also ensuring purchases are handled properly.
Once the buyer has decided which house he wants to buy, they go to closing, where the reputable title firm is hired to do a title search.
Without this step, a person can end up buying a house, only for transactions that are derailed by one of the many possible complications. This can all have an adverse effect on closing when the time comes.
The purpose of the title search is to make sure the document is "free and clear." This means there is no debt held by the property, including return taxes and mechanical liens, and a second mortgage.
This is very important because, once the property is transferred to the new owner, the new owner is responsible for all debts associated with the house. Of course, doing a search like this after the house is purchased is not the right way.
After everything has been checked, the buyer will find it at the close, where there are a lot of documents to do. Again, having a title company there can be very helpful, especially if the documents are confusing or have questions.
Most title companies recommend title insurance, which protects buyers and lenders as well.
Insurance may seem like an unnecessary luxury or even modern discomfort, but when the time comes, there is no substitute for peace of mind that comes with knowing you have done everything possible to protect your investment.