On our blog, we often talk about the listing and marketing of homes in the greater Park City area. When not talking about selling homes, we are often sharing local updates, not only in the Real Estate market, but area events of interest.

    One of the things we don’t talk too much about is some of the behind the scenes work that goes on during the contract phase of a transaction, and the settlement that brings it all together. It may not be as glamorous, but it certainly is one of the key components in buying or selling any real estate.


    In any particular transaction, there is a seller and a buyer, a listing agent and a selling agent, and of course lenders, appraisers, and home inspectors. Probably one of the most overlooked and least understood roles for the buyer and seller is the one of the title company.

    A title company is a business that prepares and issues the title insurance policy. In many states the title company can also be in charge of holding funds in escrow during the contract period as well as being in charge of the closing of the property. If you hail from back East, for example, New Jersey, Connecticut, New York, or Massachusetts, to name a few, you might be more familiar with attorneys handling some of these roles.

    Across the board, title companies are used in every transaction in the US to prepare and issue the title insurance policy. Once a property goes under contract, the title company starts a title search to make sure the title is “clear”, or free from any defects, liens, or encumbrances that affect the use and value of the property. Lenders require this so they know that all prior debts are paid off on the property, and there isn’t any matter that can devalue the home in some way.

    Once the title is searched and determined to be clear, the title company can put together an insurance policy to protect the real estate from any future claims of ownership. Fees for the title search and title insurance will be provided prior to closing for approval from all parties.

    In preparation for settlement, the title company verifies tax information on the real estate involved, as well as utilities, to make sure all costs are prorated correctly to have the seller and buyer pay these fees accordingly. Based on figures from the mortgage lender, deposits, title fees, tax fees, and utilities, the title company will draw up the closing statement, also referred to as the HUD-1.

    The title company also acts as the impartial intermediary to handle funds received to settle the transaction. In Utah, funds are received prior to settlement into an escrow account held by the title company. Once all paperwork is in order, signed and witnessed, and funds verified, then the title company can officially record the sale.

    When you go to the closing table at the title company, be prepared to bring identification, and allow plenty of time to sign pages upon pages of statements and forms. But with all these final steps in the end, the celebration of a new home follows.

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