Quick Answer
A title company researches property ownership and public records, examines title, identifies liens and other matters affecting the property, prepares a title commitment when applicable, helps resolve title requirements, supports the closing process according to its role, and ultimately facilitates issuance of title insurance policies.
When you buy or sell real estate, a title company plays a central role behind the scenes. Many people only encounter the title company at the closing table, but the company's work begins long before that day. Here is what a title company actually does, step by step.
1. The Title Order Is Opened
Everything starts when someone orders title services. This could be a real estate agent, lender, attorney, investor, or buyer. The title company receives the purchase contract and begins gathering information about the property. To open a title order with 1st Option Title, simply contact our team.
2. Property Records Are Researched
The title company searches public records for the property. This includes deeds, mortgages, liens, judgments, tax records, probate records, divorce records, and other documents that affect ownership. Learn more about what a title search involves.
3. Title Is Examined
A title examiner reviews everything found during the search. They trace the chain of ownership, identify any breaks or problems, and determine what needs to be resolved before the transaction can close.
4. A Title Commitment Is Prepared
The examiner prepares a title commitment, which is the title company's promise to issue a title insurance policy once certain requirements are met and exceptions are listed. This document is shared with the buyer, seller, lender, and agents. Learn how to read a title commitment so you understand what it says.
5. Title Issues Are Addressed
If the title search finds problems such as liens, judgments, or ownership questions, the title company works to resolve them. Sometimes a lien release is needed. Sometimes a corrective deed must be prepared. Sometimes the issue requires input from underwriting. Learn what happens when a title search finds a problem.
6. Closing Is Coordinated
The title company coordinates with all parties to schedule closing, prepares documents, collects funds, and facilitates the signing of paperwork. In some states, the title company conducts the closing itself. In others, an attorney or escrow officer handles it.
7. Documents Are Recorded
After closing, the deed and mortgage are recorded with the county. Recording provides public notice of the new ownership and the lender's interest. This is a critical step that legally transfers the property.
8. Title Insurance Policies Are Issued
Once recording is confirmed, the title insurance policies are issued to the owner and lender. These policies provide protection against covered title defects that were not discovered during the search. See our guide to what title insurance covers.
Key Takeaway
The title company is responsible for researching the title, resolving issues, coordinating closing, and issuing title insurance. Every step matters, and why experience matters when choosing a title company becomes clear when you realize how much is at stake.
Why Does the Title Company's Job Matter?
A title company's thoroughness directly affects whether you have a smooth closing and whether you are protected after closing. Mistakes or oversights can lead to delays, failed closings, or uncovered title problems. That is why choosing an experienced title company is one of the most important decisions in any real estate transaction.
Watch: What Sets 1st Option Title Apart
In this video, the 1st Option Title team explains what makes their approach to title and escrow different from other title companies. Watch to hear their founding story and how they handle even the most complex transactions.
FAQs
Does the title company represent the buyer or the seller?
The title company acts as a neutral third party. It does not represent either side in the transaction, though its work protects both parties' interests. Always verify the title company's role in your specific transaction.
Can I use any title company I want?
In many cases, yes, but the purchase contract, lender requirements, and state law all play a role. See Who Chooses the Title Company? for a full discussion.
How long does the title process take?
A typical title search and commitment can take a few days to a few weeks, depending on the property's history and complexity. Learn about the timeline from opening title to closing.