Now that you've decided to buy a home, what happens between now and the time
you legally own it? The next step is to obtain title for the property from the
title company. A title gives the owner the right to possess and use the
property. But before receiving title, the title company will need to complete
Earnest money: To show the seller and his agent you are a serious
buyer, you will be asked to give the title company a deposit called earnest
money. If the sale goes through, the earnest money is applied toward the down
payment. If the sale falls through, the earnest money will not be given back
unless it is stated in the offer to purchase that it is refundable.
Title search: A title search is a thorough check of the records
concerning the property. It is performed to verify the seller's right to change
ownership. A title search will uncover any demands, faults, liens and other
privileges or restrictions on the property.
Document preparation: Appropriate forms are prepared for settlement.
Settlement: Many events happen during settlement. The seller signs the
deed, the buyer signs the new mortgage, the old loan is paid off and the new
loan is established. The seller, real estate professionals, attorneys, surveyors
and others performing services for the parties are paid. Title insurance
policies are then delivered to the buyer and their lender.