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2. Issue title insurance to the buyers of your property
A title company not only performs a title search but also issues title insurance to the buyer of your home, guaranteeing that the new owner is protected against any future claims of property ownership.
That extra layer of protection matters because no title search is ever truly foolproof. Even highly experienced title professionals can’t uncover every issue tied to a property, since some risks, like clerical mistakes, forged documents, or unknown heirs, are especially hard to detect
A title insurance policy does not negate the need for a title search, but is issued regardless of the title search outcome.
In a standard transaction, the seller will pay for the buyer’s title insurance policy, while the buyer pays for the lender’s title insurance.
3. Maintain escrow accounts and act as escrow officer
In addition to performing the title search and issuing insurance, a title company also manages the escrow account for a home sale.
They protect the money and documents related to the transaction for the parties involved, such as the deed to the house, closing costs, earnest money deposit, and eventually the down payment and money to purchase the house from the buyer.
The title company only disburses payment and releases documentation with the written permission of the buyer and seller.
4. Oversee the final steps of the closing process
Closing a home isn’t the same in every state, and who handles it can vary. In some states, an attorney leads the closing and ensures all the legal details are correct. In others, title companies take the primary role, managing the paperwork, title insurance, and escrow. Some states use a combination of both, with attorneys and title companies working together to complete the process.
The responsibilities and procedures can differ depending on local laws and regulations. Buyers and sellers benefit from knowing who is in charge to avoid confusion during closing. Ultimately, whether it’s an attorney, a title company, or both, their job is to make sure the transaction is completed smoothly and correctly.
