HOW DOES THE TITLE PROCESS WORK?

 

Do you have a home or land you would like to buy or sell and has everyone agreed on a purchase price. If so, it is time to find the right title company and start the title process. JMFN has years of experience and knowledgeable attorneys that will help you close your transaction with piece of mind.

 

The first step is to place your title order. One of our abstractors will start searching the real estate records in the county where that particular piece of property is located. An 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. Matters of probate, heirship, divorce and bankruptcy are also addressed.

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After the abstract is completed, we issue a "title opinion letter," or if a title insurance policy is to be issued on the property, we will prepare a "commitment of title insurance" to the lender and/or the prospective buyer. The title opinion letter and the title insurance commitment (JMFN uses First American or Old Republic Title Insurance Companies) will each set forth all things that need to be completed and any problems that need to be corrected before the purchaser can receive "good title." JMFN will complete all the necessary documents and will undertake to correct any problems. Once these matters are completed and we have a lenders final approval, if one is involved, then the parties are ready to exchange paperwork and "close" the transaction.

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The purpose of the closing is to sign and exchange all the documents necessary to convey title, secure the lender, and deal with collateral issues such as leases, rights-of-way, etc., and to explain in an orderly manner the costs to each party.  This process involves preparing a closing disclosure. The closing disclosure will include the mortgage lender’s charges, charges for preparing documents, title company fees, recording costs, 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 costs associated with the deal.

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At closing, the title company will collect the purchase money funds from the buyer and lender as well as the settlement costs from each party. With these funds, the title company then pays all of the expenses of the transaction, pays off any existing mortgages, and pays the seller the net proceeds of sale. All of this is done in accordance with the closing disclosure.

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After the closing, the title company will record the legal documents (deed, mortgage, assignments, etc.) at the county courthouse and then return the original documents to the correct party. New owners receive their deed, owner's title policy if purchased, and the lender receives the original mortgage documents which they hold until the loan is paid in full. Once the loan is paid, the lender will "release" their lien against the property at the courthouse and will forward the original mortgage documents to the homeowner.