The Seller and Buyer both pay fees to their respective title companies for the closing and title services provided by those companies. The fees mainly go for closing services and towards taxes, documents and other miscellaneous costs associated with clearing title and providing the title insurance policies.
Unlike a realtor or an attorney, the Buyer’s title company’s role is to represent the Buyer as it pertains to identifying issues pertaining to the status of title to the property, however that representation may not be exclusive as the Buyer’s title company will also be representing the Lender as it relates to matters of title and the closing services to be provided. The Buyer’s title company will need to follow the written instructions provided by the lender to close the transaction. Other documents that will need to be reviewed and followed include such documents as the Purchase Agreement (which is the agreement between Buyer and the Seller), underwriter and other legal guidelines.
The Seller’s title company represents the Seller as it pertains to the closing services provided but the scope of the limitation is limited to matters or instructions laid out in the Purchase Agreement and to dealing with any issues that are pointed out as Requirements in the title commitment prepared by the Buyer’s title company. Note that it is not uncommon for the Buyer and Seller to use the same title company.
In order for title to transfer over to the buyer, the seller needs to sign a document called a Deed. The Deed is a legal document that is drafted for the closing stating that the seller is transferring their interests in the property to the buyer. A common misconception is that the seller needs to bring their title to closing and then give it to the buyer. There is no such thing as a “title.” Another misconception is that the seller’s abstract of title is their title.
The abstract is merely a history of the recorded information pertaining to the property. The use of abstracts has greatly diminished due to the ability to gather the historical and public information online.