Whether you are buying or selling real estate, or if you are a real estate agent or a mortgage lender, you may wonder exactly what it is that title insurance agents do. After all, when you are at the closing table, the agent usually hands out a lot of complicated documents to sign.
It is easy to say that a title agent conducts a search on property records to check for title defects or other attachments to the property, such as liens. But in reality, the title agent’s purpose is much subtler. Title agents are in the business of insuring expectations.
The buyer of real property expects to receive a property title that is clear of defects; the mortgage lender expects to have a valid and enforceable lien. The title agent is in the business of managing both parties’ expectations regarding the process of the transaction.
Not only must the transaction be accomplished correctly, but the process of the transaction must also further the interests of those involved. The buyer expects to move into his or her new home quickly; the mortgage lender expects the process to comply with all regulatory requirements, maintain its economic interest through expediency, and enhance its relationship with the customer. A good and efficient title agent will identify and rectify defects to title and insure that a lien is enforceable using a process that meets both buyer and lender expectations.
To sum up, the title agent manages any and all expectations relating to the property. To the average home seller and home buyer, property is a thing — land, an automobile, stocks and bonds, a case of scotch — but to a lawyer, abstractor or title agent, property is not a thing at all, but a concept. To them, it is the legal relationship among people in regard to a physical thing or even an intangible subject, such as an idea, e.g., a patent or copyright. This is what we mean when we say title agents insure expectations.