The process of finding and buying real estate can be complex and time-consuming, and some of the biggest challenges can come during closing.
Due to the significant risks associated with purchasing property, many buyers choose to work with a professional to help them navigate the closing of the transaction, often a law firm or title company. However, these two entities provide different services.
What is a title company?
A title company facilitates the closing of a real estate contract and issues title insurance. This company does not insure the title itself; instead, it connects buyers with authorized insurers. As a part of its closing services, a title company will inspect the title and ensure that it does not have any liens or judgments that could affect the buyer’s ownership.
A title company cannot provide legal advice to its clients, and such a business is often limited in what services it can provide.
Can a law firm provide closing services?
A law firm can provide the same services as a title company. This means it can issue title insurance, provided it has the correct authorization. Lawyers can also inspect titles and provide escrow services. In addition, law firms can coordinate the entire closing process and act as a bridge between the buyer and other stakeholders, including the seller, lender and local governments.
Though both law firms and title companies can provide closing services, many buyers prefer to work with a legal team. Lawyers have extensive knowledge of real estate law and must meet high standards in their practice.