Holding “title” means that you are the rightful, legal owner of your property. Title companies usually handle all things “title” related in a real estate deal including the title search, issuing title insurance and accepting escrow deposits. The title company plays an important role in making sure that the title is clear for a deed transfer to the new buyer.
On the purchase agreement, you should have indicated how much you require from buyer as an earnest money deposit, or a “good faith” deposit. This is money that the buyer gives to the buyer’s agent, broker, attorney or title company to show the seller that the buyer has a stake in making sure this deal goes smoothly. At the end of closing, this money will be given to the seller as part of the down payment. If the buyer backs out of the contract because of the home appraisal or during the home inspection period, this money is returned to the buyer.
The title company will also perform a title search, which is a review of public records to determine if there are any existing liens or open permits that exist for the property. If any existing liens or open permits exists, you are responsible for resolving them prior to closing.