What Does a Title Company Do?

The job of the title company begins well before settlement. Our team compiles information from many sources, including land and court records. We coordinate with all parties involved in the settlement transaction, interfacing with real estate agents and lenders. We conduct and review a title search, identifying potential problems and clearing any judgments and/or liens against the property. At the closing, the title company collects and disburses funds from the transaction, transfers ownership of property, and issues title insurance.

Title Search

Our team will perform a title search of public records to make sure that there are no issues that could impact the transfer from seller to buyer. A clean title indicates that there are no liens, unpaid taxes, fraud, or heirs with rights to the property in question. The buyer will receive a title commitment to review before a title insurance policy is generated.

Title Insurance

Title insurance protects a lender or buyer’s interest in the property against loss due to unknown title defects.

There are two types of title insurance: lender’s and owner’s. The lender’s policy protects the lender’s interest in the property up to the outstanding balance of the mortgage. The lender requires that the buyer purchase this policy on behalf of the lender, but the policy only protects the lender’s interest, not the buyer. The owner’s policy protects the buyer for the same. Owner’s coverage provides legal defense for any liability or loss that may arise.

Owner’s Title Insurance

Unlike a lender’s policy, an owner’s policy is not required to close on the purchase of a home, but it is recommended as an extra layer of protection should there be a defect in title. For example, if a previous owner did not pay a contractor or defaulted on their taxes, there could be a lien on your property that impacts your ownership. An owner’s policy will provide a defense attorney in these circumstances and compensation if you lose your case in court.