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Role of Title Companies

The role of a title company is a BIG one. The title company will be the one who will verify that the title to the property you are purchasing is legitimately given to you as the new home buyer. Essentially, they make sure that a seller has the rights to sell the property to a buyer. They will also be the ones who handle the title insurance policy and be responsible for conducting the actual closing.

Title companies also often maintain escrow accounts that contain the funds needed to close on the home to ensure that this money is used only for settlement and closing costs, and may conduct the formal closing on the home.

At the closing, a settlement agent from the title company will bring all the necessary documentation, explain it to the parties, collect closing costs and distribute monies. Finally, the title company will ensure that the new titles, deeds and other documents are filed with the appropriate entities.

Questions you may have about Title Companies:

  • Title Insurance- Once the title is found to be valid, the title company will likely issue a title insurance policy, which protects lenders and/or owners against claims or legal fees that may arise from disputes over the ownership of the property.

  • Picking a Title Company- Ask your real estate agent, peers who have recently bought a home or your lender for recommendations for a title company.

  • Title Company Charges- The cost of title insurance depends on the size of the loan and varies greatly depending on the state. The good news is that the premium is a one-time fee you pay at closing, not an ongoing expense.

  • Meeting the Title Company-You may meet with or talk to an agent from the title company on multiple occasions. First, you may decide to meet with a few agents from title companies before you buy your home to help you decide which company to go with.

If the title company maintains an escrow account for you, the agent may reach out to you to provide details on that account or you may contact him with questions. If your title company handles your closing, you will meet with a settlement agent in person then.

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