6 Things The Title Company Is Responsible For When Buying or Selling Real Estate in New Jersey

6 Things The Title Company Is Responsible For When Buying or Selling Real Estate in New Jersey

Whether you’re buying or selling real estate, you can bet a title company will be involved. In fact, title companies have certain key roles in any real estate transaction, often acting as an agent for the buyer, the seller, the insurance company, and most other parties in the transaction. Title companies, then, have some vital functions in real estate transactions, but what are they, exactly? Let’s try to answer that question by examining 6 things the title company is responsible for when buying or selling real estate in New Jersey.

1. Performing Title Search

Most people are aware of the number-one thing the title company is responsible for. And that is performing the title search and review – a vital function to protect both buyers and sellers.

“Title companies,” according to experts in this area, “have sophisticated real estate title search and review departments. These departments review the public records relating to real estate, in order to inform all interested parties of the status and condition of title to the subject property. Title companies generally provide this information to each of the parties in the form of a preliminary title report, or commitment for title insurance. Title companies also provide title research information related to foreclosures and other types of legal action involving real property.”

This title search is so vitally important because it ensures that the seller is in fact the owner of the property and can actually sell it. And that, in turn, protects the buyer from paying for a property that a seller can’t legally sell.

2. Preparing Title Abstract and Opinion

Also, for the purchase or sale of real estate in New Jersey, the title company is responsible for preparing the title abstract and opinion. The abstract is basically a document that details the history of ownership for a property. “It not only covers when the property is sold, but records related inheritance [issues], court litigation and tax sales as well. Looking at the abstract gives you a great way to determine the history of the property.”

The opinion is pretty much what the name suggests. The title company states in a formal document form, whether “they think the seller has a valid title to the property and they would feel comfortable insuring the title if you’re doing a purchase or refinance.” And if there are any title issues, the opinion will indicate them as well as what needs to be done to clear the title.

3. Serving as Closing Agent

In addition, a New Jersey title company is often responsible for serving as the closing agent in the transaction. Typically in this role, the title company serves as an agent for all the parties involved in the transaction, and the title company’s duties here include:

  • Getting signatures on all the closing documents
  • Receiving and distributing “payments related to the conveyance transaction”
  • Recording “documents that need to be recorded, such as deeds and mortgages” at the county courthouse

4. Serving as Escrow Officer

Commonly, a title company is responsible for serving as an escrow officer. This means the title company, in the role of escrow officer, “holds documents or money as a part of the transaction and according to the instructions of the parties.”

The buyer, for example, might give the purchase price money to the title company to hold. On the other side of the transaction, the seller might hand over the signed deed to the title company. Then following the buyer’s and seller’s written instructions, the title company would hand over the money and deed to the appropriate parties at the designated time.

5. Issuing Title Insurance

A title company is also responsible for issuing title insurance policies on behalf of the title insurance companies in the buying or selling real estate in New Jersey. Typically, the policy issuing title company isn’t the actual insurer but is simply acting as an independent agent of the insurance company and receives a commission the service. Basically, the title company just facilitates the paperwork involved in the issuance of the insurance policy.

Title insurance comes in two types:


This type of title insurance “is meant to protect the mortgage lender if there’s an issue down the line with the title that causes you to lose the house in a property dispute. Mortgage companies require this because if something does go wrong, the insurance policy covers the loan amount.”


This type of title insurance protects the buyer of the New Jersey real estate by providing – in the case of title problems discovered further down the road – protection for the built-up equity.

6. Conducting Property Survey

When it is required, a title company may be responsible for conducting the property survey. The title company may order a survey or drawing to ensure there are no encroachment problems with the property. Such problems would include things like a neighbor’s addition being built on the property or the structure on the property not within designated boundaries.

If this all sounds fairly complicated, well, it is. In fact, there’s often more than a title company is responsible for when buying or selling real estate in New Jersey. Your local real estate agent, though, can help you navigate smoothly through all this. So, whether you’re buying or selling New Jersey real estate, find out today how our experienced agents can assist you. Just give us a call at (855) 932-8987!

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