What Does a Title Agency Do?
Navigating the complexities of real estate transactions can be challenging. Fortunately, a title agency can help ensure a smooth process.
A title agency serves as a neutral third party that ensures all legal and financial obligations are met during the purchase or sale of a property.
Title Search: Verifying Legal Ownership
The first key task of a title agency is conducting a title search. This process involves examining public records to verify the legal ownership of the property. The aim is to confirm that the seller has the right to sell the property and the buyer will receive a clean title upon purchase.
Example: Consider the case of Mr. Smith, who decides to sell his property. During the title search, a title agency would uncover any liens, such as unpaid property taxes, protecting the potential buyer, Mr. Johnson, from inheriting the debt.
Title Insurance: Shielding From Financial Loss
Another critical function of a title agency is providing title insurance. This indemnity insurance protects the buyer and lender from financial loss due to defects in the title. It covers past occurrences that may come to light after the transaction, such as fraud, forgery, undisclosed heirs, or mistakes in the public record.
Example: After purchasing a home, Ms. Davis discovered an undisclosed heir, Mr. Williams, who claimed ownership of the property. If Ms. Davis had title insurance, her policy would cover the legal fees and any financial loss if Mr. Williams’ claim was valid.
The Necessity of Using a Title Company
While using a title company when buying a home is not legally required in Maryland, it is highly recommended. A title agency provides an extra layer of protection for buyers and sellers. It helps ensure a smooth transaction by dealing with complex legal paperwork, coordinating with lenders, handling funds, and facilitating the closing process.
Example: Mrs. Thompson buys a home without using a title agency. She later discovered a mistake in the property’s legal description, leading to a dispute over the property’s boundaries. This error could have been detected and corrected if she had used a title agency.
Potential Pitfalls Without a Title Agency
Without a title agency, several issues can arise, including disputes over ownership, problems with the property’s history, and complications with the closing process. These problems can lead to costly legal battles, delays, and even the nullification of the property transaction.
A real estate law firm is equipped with the experience necessary to navigate the intricacies of property transactions, protecting against potential pitfalls. Not only can they conduct thorough title investigations to uncover any underlying issues such as liens, undisclosed heirs, or errors in the public record, but they can also interpret and advise on complex legal paperwork to ensure a clear understanding of all obligations and liabilities.
A law firm can negotiate contracts, ensuring the terms are fair and protect their client’s interests. In a dispute over property boundaries or ownership, they can represent their client in court, offering a robust defense strategy based on their deep understanding of real estate law.
An Annapolis Real Estate Lawyer at Oliveri & Larsen Can Protect Your Purchase
Purchasing a home is a wonderful step, but you must ensure the title is in good shape. Title agencies are there to help you, but sometimes make mistakes. For legal help, speak with an Annapolis real estate lawyer at Oliveri & Larsen today. Contact us online or call us at 410-295-3000 to schedule a consultation. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.