What Is a Title Company?

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A title company is used in real estate transactions to protect lenders and owners from financial losses due to defects in the title of a house. Check for tax liens, IRS liens or any other problems with a property by locating a title company with help from a certified public accountant and personal financial planner in this free video on real estate.

Part of the Video Series: Tax Law, Real Estate & Credit Tips
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Video Transcript

Hi, I'm Miranda Chook, a CPA. Title companies are used in real estate transactions. They are meant to protect lenders and owners from financial losses due to any defects in title; due to any undisclosed, that would otherwise be undisclosed liens and easements. Now during the home purchasing process, you get a copy of the preliminary title report. What you should be looking for there are tax liens, IRS liens; other creditors; you know, anything that in addition to the current owner's mortgage or equity line of credit that would otherwise be taken cared of with the sale of the home. You might also see things like right to access or noise easements on the title report. If you don't understand something in the report, ask your Realtor or ask the title company. You need to understand this so you don't get in trouble and buy a house that its lien use, its collateral for someone else debts. So good luck.


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