Why Do You Need a Settlement Service Provider?
If you intend to buy a home, and think it’s a simple process, probably you aren’t much acquainted with the workings of a real estate deal. There are numerous other stakeholders, except you and the seller, involved that makes this process a complete one.
While finalizing the deal, you have to enter into an agreement that mentions details of these companies and other general information. These settlement service providers work as a third party between you and the seller. It is mandatory to involve such companies while buying a real estate property.
The benefit of using such service is there are lesser disputes among both the main parties. For instance, after you pay the initial amount, you wouldn’t be sure you will get the deed unless you involve a settlement service provider in the trade. The initial amount is safeguarded by these companies, and they are responsible for most of the activities that take place till end of deal.
Due to the services it provides, it becomes quite significant for you and the seller to hire a settlement service provider. After the finalization of the deal, both the parties have to pay fees to such companies.
The selection of this company is, however, quite an intricate process, mainly due to two reasons. You don’t buy property every other day, so you aren’t much aware about the company’s availability, its ranking, services, etc. Second, many settlement companies are fraudulent. So, it’s wise to conduct a research before you select any of these companies. Or you can seek help from your agent, who are well-versed with such service providers.
However, the right to select settlement service provider for the deal is also enjoyed by the seller. Hence, the other party will have their own recommendations, which can be a negotiating opportunity for you. It’s an unwritten rule that if one party selects settlement company, the other party chooses title insurance provider.
Title insurance is equally important. By having a title insurance or an Owner’s Policy, the title of ownership comes to you. And if there’s any dispute regarding the title, you can consult you insurance provide and ask them to solve it immediately. Usually, seller pays for this insurance. Hence, they choose the company that’s beneficial to them.