Who does the Title Company work for?

Question

Whe buying a house or piece of property, does the Title Company work for the buyer, the seller, or are they neutral, just playing the part of administering the deal?

Answer 1

When buying a house or piece of property, does the Title Company work for the buyer, the seller, or are they neutral, just playing the part of administering the deal?

It depends on what you mean by title company.

In one case they are the company handling the closing.

Some call this a settlement company, but many have the word Title in the name. In my real estate transactions the buyer has paid for the service a part of the settlement costs. Who is picked is a negotiation between buyer and seller. On a day I sold one house and bought another having them back-to-back in the same office was the most convenient.

The Title company agent may be a lawyer, but at least in Virginia they don't have to be. But even if they are a lawyer they don't represent either party. They are making sure all the proper forms and money is ending up in the correct place at the correct times. They will facilitate the transaction, but they don't protect either side from a bad deal.

The other use of the term Title company may mean Title Insurance Company.

They are a company that insure the lender, in case there is a problem with the ownership of the property. The lender will make you buy the Title insurance policy. They will dictate who to use, and the term of the policy.

The buyer of the property can also buy an optional policy to protect themselves if the title is bad. The lender doesn't require you to purchase this policy.

Title policies protect the lender and you when the ownership is not clear. The ex-spouse may claim ownership, the homeowners association may claim back dues owed, a construction company may claim that they were never paid. In some cases the issue could have occurred years before your transaction, and were missed during the title search. Without a policy the ownership could revert to the previous party. The lender wants their policy to make sure they don't lose their money, you want a policy to make sure you don't lose the equity and the roof over your head.

Answer 2

In Massachusetts (all i have experience with) they do nothing but sell you a service. RE agents here often push this product because they get a commission on the sale, but it may not be worth the cost; ask your lawyer for advice on that. (You do have a lawyer examining the paperwork, right? Their lawyer does work for them, not for you.)

Things may be different elsewhere. If so, your real estate lawyer will know, and will be able to help you evaluate whether you need to buy this protection or not.

(Better? )