Definition
A company that provides title insurance, conducts title searches, and coordinates the closing process by preparing settlement statements, managing funds, and recording documents.
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Title companies perform a critical role in real estate transactions by searching public records to verify the seller has clear ownership of the property and that no liens, judgments, or other encumbrances exist. They issue title insurance policies to protect the buyer and lender against future ownership disputes. Title companies also typically serve as closing agents, holding funds in escrow until all conditions are met.
Pro Tip
Ask for title company recommendations from your real estate agent or lender. Compare title insurance rates, as they are often negotiable.
Example
First American Title searched public records for the property at 123 Main Street, discovered no liens or title defects, issued an owner's title policy protecting the buyer for $350,000, and facilitated the closing meeting.