THE TITLE TO YOUR HOME.

.WHAT IS A TITLE?
It is the instrument that proves ownership. It sets a piece of property apart from any other and lists the rightful owners, those who have the right to use and transfer it to whomever, whenever they choose.

.ITS IMPORTANCE:
Its importance is critical in any financing transaction: for starters one cannot transfer, encumber or dispose of something they do not own. Lenders do not want to commit their funds unless they are certain that the person/entity who is either buying or refinancing owns the subject property. They also want to know that there are no other claims against it that may jeopardize their investment. Before any closing can take place, the owner and all existing claims must be identified (taxes, co-owners, mortgages, liens and restrictions, etc...). All these items must be addressed to the lender's satisfaction and I must add, to the buyer's satisfaction.
The title is the icing on the cake whose absence will ruin a marriage.

THE ROLE OF TITLE COMPANIES:
These companies that are insurers of title are not creators of this document Their role is to collect information related to a piece of real estate (title search) from the appropriate authorities (counties, state), and provide insurance against past claims,(special assessment by a municipality for sewer work, a judgement filed against the owner, a mortgage, back taxes). The title company is the guarantor against whom any future claims for past liens (before closing) are directed. In short, the title company must make sure that all known liens(recorded) against a property are cleared before or at closing. Title companies have fiduciary responsibility to the lender, seller and indirectly to the buyer.

PREPARATION:
In order to avoid headaches during financing, buyers and sellers through their Attorneys must make sure that the title is clear or can be cleared of all liens at closing. Lenders rely on the title or escrow companies to deliver a claims free title.
A faulty title will kill a transaction even if the borrower qualifies for financing because a "clear to close" status is only granted when all the lender's conditions are met. Since a title is needed for every transaction, I would advise sellers to order it before listing their properties for sale. Just like credit reports, titles can yield unexpected contents.
The more you know, the better prepared you will be.