The role of a title agency in commercial transactions.

Title agencies are often the unsung heroes of commercial real estate transactions. Most people understand the roles of the buyer, seller and brokers or agents, but what does a title agency do? A trusted title company provides the foundation for a smooth and secure property transfer. Title professionals are the individuals working behind the scenes to prepare and inform all involved parties, as well as organize and evaluate public records related to the property for sale. As the Southwest continues to experience growth in commercial real estate, it is a good time to dive into the pivotal role title agencies play in commercial real estate transactions.

Southwest real estate landscape

The Southwest region of the United States boasts a diverse and dynamic real estate market. From sprawling urban developments in cities like Phoenix and Las Vegas to the vast expanses of land dedicated to agriculture and energy projects, commercial real estate transactions in this region are as varied as the landscape itself.

The Southwest has a few unique characteristics to consider, including complex land-use regulations, water rights considerations and the influence of energy industries, making it imperative for stakeholders to navigate these intricacies with precision. Title agencies operating in the Southwest must have a deep understanding of local regulations and industry nuances.

The role of a title agency

1. Title search

At the heart of a title agency’s responsibilities is the thorough examination of the property title. This process involves scrutinizing public records to ensure that the title is clear of any encumbrances or legal issues. Any issues with a property’s title could negatively affect the transaction. After a successful title search, the title company will issue a title commitment that outlines the details of the search, guarantees insurance coverage and outlines the coverage.

2. Title insurance

Title companies issue title insurance policies that protect buyers and lenders against any unforeseen claims that were not uncovered during the title search but may arise in the future. Insurance policies are issued after the closing of the property. Should an issue arise, the title company will take the necessary action to resolve the claim. This could include paying a lien or taking legal action to correct the property title.

3. Due diligence

Due diligence is paramount in every successful transaction, no matter where it is located. Title companies conduct due diligence by uncovering potential issues related to zoning regulations, land use restrictions and environmental concerns. By documenting a complete property history, title companies help all parties make informed decisions during the transaction.

4. Escrow services

Title companies are also responsible for providing a transparent and secure transfer of funds. Acting as a neutral third party, the title company will hold funds in escrow until all conditions of the transaction are met. This assures buyers that their money goes to the right place at the right time while assuring sellers that the buyer has the proper funds to purchase the property.

5. Stakeholder coordination

A typical commercial real estate transaction involves multiple parties including lenders, attorneys and real estate agents. The title professionals act as coordinators, ensuring that all stakeholders are on the same page and that the transaction progresses smoothly.

6. Settlement and closing

The final step in a commercial real estate transaction involves the closing process. Title companies oversee this crucial phase, ensuring that all necessary documents are executed correctly and that the transfer of ownership is legally sound.

A title company is responsible for the detailed process necessary for a successful closing, making it important to choose a proven team of experienced professionals. Landmark Title has a proven track record of facilitating successful transactions and providing personalized service. If you have any questions about a property title or our services, please get in touch.