Understanding the Importance of Title Services in Real Estate

By: Alison Orlando

Q: Can you introduce yourself and tell us a bit about your background?

A: Hello, I’m Alison Orlando with Judicial Title, which has serviced the title industry for over 40 years. I work with homebuyers, sellers, real estate agents, and lenders and their attorneys to ensure the smooth transfer of property ownership. My role involves conducting title searches, resolving any title issues,  providing title insurance at the closing to protect against potential future claims.

Q: What exactly are title services, and why are they important in real estate transactions?

A: Title services involve researching and verifying the legal ownership of a property and ensuring that there are no outstanding claims or liens against it. This is crucial because it protects both buyers and lenders from potential legal issues that could arise after the purchase. Title insurance is a key component, offering financial protection in case of any disputes over property ownership.

Q: What are the common issues that can arise during a title search?

A: Several issues can come up during a title search, including:

1. Outstanding Liens: Previous owners may have unpaid debts secured by the property.
2. Easements: There might be rights of way or other easements that could affect the use of the property.
3. Undisclosed Heirs: In cases of inherited property, undisclosed heirs could claim ownership.
4. Errors in Public Records: Mistakes in public records can affect the ownership or sale of the property.
5. Boundary Disputes: Discrepancies in property boundaries can lead to disputes with neighbors.

Q: How does title insurance work, and what does it cover?

A: Title insurance protects against financial loss from title defects that were not discovered during the title search. There are two types of title insurance: lender’s title insurance and owner’s title insurance. Lender’s title insurance protects the lender’s interest in the property, while owner’s title insurance protects the buyer’s investment. Coverage includes issues such as liens, encumbrances, and defects in the title.

Q: What steps should a homebuyer take to ensure they have clear title to a property?

A: Homebuyers should:

1. Work with a Reputable Title Company: Choose a title company with a good reputation and experience.
2. Order a Title Search: Ensure a thorough title search is conducted to uncover any potential issues.
3. Review the Title Report: Carefully review the title report and address any concerns with the title professional.
4. Purchase Title Insurance: Obtain both lender’s and owner’s title insurance for comprehensive protection.
5. Address Issues Promptly: Resolve any title issues before closing to avoid future complications.

Q: What role do title services play in the closing process of a real estate transaction?

A: Title services are integral to the closing process. We:

1. Conduct Title Searches: Ensure there are no outstanding issues with the title.
2. Prepare Closing Documents: Draft and review documents needed for the transfer of ownership.
3. Facilitate the Closing: Coordinate with all parties involved to ensure a smooth closing process.
4. Disburse Funds: Handle the disbursement of funds to the appropriate parties.
5. Record Documents: Ensure that the deed and other necessary documents are properly recorded with the county.

Q: Can you explain the difference between a deed and a title?

A: A deed is a legal document that transfers ownership of a property from one party to another. It includes details about the property and the parties involved. A title, on the other hand, is a legal concept that signifies ownership rights in a property. The title includes the legal rights to use, control, and transfer the property.

Q: How can potential buyers protect themselves from title fraud?

A: To protect against title fraud, buyers should:

1. Conduct Thorough Due Diligence: Work with a reputable title company to perform a comprehensive title search.
2. Purchase Title Insurance: Obtain title insurance to protect against potential fraud.
3. Monitor Property Records: Regularly check public records for any unauthorized changes or filings.
4. Secure Personal Information: Be cautious about sharing personal information to prevent identity theft.

Q: What trends or changes in the title services industry should buyers and sellers be aware of?

A: Some current trends include:

1. Increased Use of Technology: Digital tools and online platforms are streamlining the title search and closing processes.
2. Enhanced Security Measures: Title companies are implementing stronger security protocols to protect against fraud.
3. Remote Closings: The rise of remote and e-closings allows for more flexibility and convenience in completing transactions.
4. Regulatory Changes: Staying informed about changes in real estate laws and regulations is crucial for compliance and protection.

Q: What advice would you give to someone entering the title services industry?

A: For those entering the industry, I would advise:

1. Gain Relevant Education: Pursue relevant education and training in real estate and title services.
2. Obtain Licensing: Ensure you obtain the necessary licenses and certifications for your role.
3. Build Relationships: Establish strong relationships with real estate agents, lenders, and other professionals in the industry.
4. Stay Informed: Keep up with industry trends, laws, and best practices to provide the best service to clients.
5. Develop Attention to Detail: Accuracy is crucial in this field, so honing your attention to detail is essential.