There’s nothing quite like that post-closing feeling in a real estate transaction. Once the keys to a new property are handed over, the buyer and seller alike can celebrate this major milestone. However, after the closing papers are signed, the title company continues to play a crucial role in ensuring a smooth transition of ownership.
In fact, while the closing marks the finish line in the home buying or selling process, the title company stands ready to complete several behind-the-scenes tasks to finalize the sale. While each state has different requirements, these tasks are essential in wrapping up the transaction. Let’s explore what happens after the parties leave the closing table.
When the Closing Is Over, the Title Company Still Works to Seal the Deal
Naturally, a title company does much more than simply provide title insurance. At every step in the process of finalizing a real estate transaction, title companies work to ensure the legality of the purchase — and this work can continue long after the buyer has settled into their new home.
Here are the key responsibilities of the title company after the closing:
Implement Recordation and Documentation
One of the primary post-closing tasks of the title company is to record the deed and other relevant documents with the appropriate government office (usually the county recorder’s office). Before the deed is filed, the title company, and sometimes an attorney, will review the documents once more for accuracy. Typically, documents are submitted for recording within 48 hours of closing, with the county authority executing the final recording.
Issue Title Insurance Policies
As the hallmark of any title company, title insurance policies are issued either at the time of closing or after the closing to both the buyer and the lender. These policies protect against any future claims or defects related to the property title. Before they may be issued, depending on the local practices, a review of the title commitment, all title clearing documents, the settlement statement, and the recorded documents from the closing are often required. The documents are reviewed for accuracy, and lender instructions are verified to ensure the lender receives the requested coverage and endorsements.
Pay Off Existing Mortgages, Liens, and Taxes
The title company also ensures that any existing mortgages, liens, taxes, or judgments on the property are paid off in order to transfer clear title to the buyer. While the buyer’s purchase is protected, the title company is responsible for making sure that the liens are properly released and filed.
Handle Disbursement of Funds
As per the closing statement, the title company distributes funds to the designated parties. This includes paying off existing loans, real estate agent commissions, and other closing costs. To ensure the proper disbursement of a transaction, all incoming and outgoing funds are verified to be balanced and accurate. After disbursement, files are audited for possible shortages or overages and any refunds are disbursed and sent to the appropriate party.
Conduct Title Search and Clearance
After the closing, the title company continues to verify the title by conducting one or more post-closing title searches. This important step again confirms the property’s rightful, legal owner and reveals any claims or liens that could affect its purchase. Any outstanding issues are addressed promptly, with the resolution timing based on the complexity of the outstanding claims.
Communicate with Parties
The title team communicates with the buyer, seller, real estate agents, and lenders to ensure all necessary steps are completed. In this way, the title company essentially acts as the combined agent of all the parties in a real estate transaction, as well as their communication hub.
Proliant Works Behind the Scenes So You Can Focus on Customer Service
As you can see, the title company’s work extends beyond the closing table to ensure a seamless transfer of ownership and protect the buyer’s interests. At Proliant Settlement Systems, we not only handle post-closing requirements, but we also offer entrepreneurs a unique opportunity to own their own title company.
Our private-label, fully compliant franchise system allows you to focus on customer service while we provide your back-office support. We make it possible for you to run a full-service title company, complete with all the financial operational advantages and support systems that eliminate the most difficult barriers to entry.
While we handle everything from title production to processing to post-closing duties, you can build your brand and operate as an independent company dedicated to your valued customers.