The “for sale by owner” signs might not be as numerous as signs placed by real estate agents, but there are plenty of people in New Jersey, both sellers and buyers, who prefer private transactions. A transaction between family members of friends, for example, can be easily arranged without involving real estate agents. However, just because you can do without an agent, doesn’t mean you should avoid all third party involvement. In fact, hiring a reliable New Jersey title company is a crucial step you shouldn’t skip, and here is why.
Benefits of a Private Transaction
Both sellers and buyers choose private real estate transactions for many reasons:
- The seller doesn’t have to inflate the price to account for the agent’s fees.
- The buyer has direct access to the seller and can obtain any information straight from the source.
- The seller can offer details about the house and the neighborhood the agent wouldn’t know.
What’s the Role of a Title Company?
If you are going into a sale-by-owner transaction hoping to save money by not using an agent, you might be hesitant to pay for other, seemingly non-important, services. And if it’s your first real estate purchase, it’s possible you’ve never worked with a title company before and don’t know what it does. A title company can assist you in your transaction in many different ways:
To Issue Title Insurance
Title insurance is the type of insurance you can purchase to protect yourself from possible title defects. Your New Jersey title company will conduct a title search and collect all the information we can find about the property you plan on purchasing. We will make sure that the title is clean and the seller is authorized to sell the house.
If you were obtaining a mortgage to pay for the property, the lender would have required you to purchase title insurance. If you are paying all cash or have worked out a private financing plan with the seller, it’s easy to overlook such an important step as title insurance. Even if you are buying from a person you know really well, you should still get title insurance. It’s not an issue of trust—there could be past problems with the title the seller simply doesn’t know about.
To Serve as an Escrow Agent
Many title companies (including us) also offer escrow services. An escrow agent is an independent third party that takes the responsibility to hold money and documents until it’s time to release them to the seller and the buyer respectively. As a buyer, you want to make sure all the conditions of the sale are met before you transfer funds to the seller. This is exactly what an escrow agent does.
To Prepare the Contract of Sale
This is not something all title companies do, but that’s why it’s a good idea to hire a company with a legal background. At Armour Title, we offer contract preparation services to all of our residential and commercial clients. We can also serve as your closing agent and make sure the deed and other legal documents are properly recorded with the appropriate state offices.
As you can tell, a title company is, so to speak, the meat of a real estate transaction. A real estate agent helps you find the property or put it on the market if you are a seller, but the title company is what gets the gears moving and makes sure everything goes smoothly.
Are you looking for proper guidance and representation in a private real estate transaction? Give us a call or contact us online and we’ll be happy to help.