What the Title Company Does
Title search and examination
Title search and examination
The title company researches the property’s ownership history through public records. They identify liens, judgments, easements, and any claims that could affect your ownership. Issues must be resolved before closing.
Holds earnest money
Holds earnest money
Your earnest money deposit is held in an escrow account managed by the title company. Neither buyer nor seller can access these funds until contract terms authorize release.
Issues title insurance
Issues title insurance
Title insurance protects against defects in ownership discovered after closing. The title company issues policies after completing their examination.
Prepares closing documents
Prepares closing documents
The title company coordinates with your lender to prepare all documents needed for closing, including the settlement statement showing final costs and credits.
Conducts closing
Conducts closing
A settlement agent or attorney (depending on state) conducts the closing appointment where documents are signed, funds are transferred, and ownership changes hands.
Records the deed
Records the deed
After closing, the title company records the deed and mortgage with the county, making your ownership part of public record.
Title Insurance
Title insurance protects against problems with property ownership that weren’t discovered during the title search. Unlike other insurance that protects against future events, title insurance protects against past events that surface later. What it covers:- Forged signatures in the ownership chain
- Unknown heirs claiming ownership
- Recording errors in public records
- Undisclosed liens or judgments
- Fraud in prior transactions
Two Types of Policies
Lender's policy (required)
Lender's policy (required)
Protects the lender’s investment in your property. Required for any mortgage transaction. Coverage equals the loan amount and decreases as you pay down the mortgage. Does not protect you.
Owner's policy (recommended)
Owner's policy (recommended)
Protects your investment in the property. Optional but strongly recommended. Coverage equals the purchase price and remains in effect as long as you own the property. One-time premium paid at closing.
Without an owner’s policy, you’re personally responsible for legal defense and any financial losses if a title problem surfaces after closing. The lender’s policy only protects the lender, not you.
Wire Fraud Protection
Wire fraud targeting real estate transactions cost buyers over $350 million in 2023, according to FBI data. Fraud increased 65% from 2020 to 2023, with average losses of $150,000 per incident.How Wire Fraud Works
Email compromise
Email compromise
Criminals hack into email accounts of parties involved in transactions. They monitor communications to learn details, timing, and who’s involved.
Timing the attack
Timing the attack
Scammers wait for high-value transfers with tight deadlines: earnest money deposits, down payments, or closing funds.
Fraudulent instructions
Fraudulent instructions
Fake wire instructions are sent from compromised accounts or look-alike email addresses. They reference correct property details and party names to appear legitimate.
Funds disappear
Funds disappear
Victims wire money to scammer-controlled accounts. Transfers complete instantly. By the time fraud is discovered, money has been moved and recovery is rare.
Protecting Yourself
Before wiring any funds:- Call the title company using a phone number from their website or your contract
- Speak with someone you’ve communicated with before
- Verbally verify all wire details: account number, routing number, bank name
- Confirm again after sending to verify receipt
Wire Fraud Insurance
Title companies should carry wire fraud insurance (also called cyber insurance or funds transfer fraud coverage). This protects you if fraud occurs despite security measures. Questions to ask:- Do you carry wire fraud insurance?
- What’s the coverage amount?
- What security protocols do you use for wire instructions?
- Do you use encrypted portals or only email?
Settlement Agent vs Notary
Who conducts your closing matters. Not everyone at the closing table can answer your questions.| Settlement Agent / Attorney | Notary | |
|---|---|---|
| Can explain documents | Yes | Not guaranteed |
| Can answer legal questions | Yes | No |
| Can sell title insurance | Yes | No |
| Role | Guide you through closing | Witness signatures |
| Training | Licensed professional | Signature verification only |
Settlement agent
Settlement agent
A licensed professional who can explain documents, answer questions about what you’re signing, and guide you through the closing process. Can sell title insurance and handle the transaction.
Notary
Notary
Trained only to witness signatures and verify identity. Cannot explain documents or answer questions about what you’re signing. Says “sign here, initial here, date here.”
Ask your title company: “Who will conduct my closing? Will they be able to answer questions about the documents I’m signing?”
The Closing Process
Before Closing Day
Closing Disclosure (3 days before)
Closing Disclosure (3 days before)
Federal law (TILA) requires you receive the Closing Disclosure at least 3 business days before closing. This document shows final loan terms, closing costs, and cash needed. Review it carefully and compare to your original Loan Estimate. Question any discrepancies before closing day.
Final walkthrough (24-48 hours before)
Final walkthrough (24-48 hours before)
Your opportunity to verify the property is in agreed-upon condition. Confirm repairs were completed, included items are present, and nothing has changed since inspection. Don’t skip this.
Wire funds (1-2 days before)
Wire funds (1-2 days before)
Wire your closing funds to the title company in advance. Verify wire instructions by phone before sending. Call to confirm receipt after sending. Wires should be initiated 1-2 days before closing to ensure funds arrive on time.
Closing Day
Closing appointments typically last 1-2 hours. Here’s what happens:1
Identity verification
Bring government-issued photo ID. The settlement agent verifies your identity before proceeding.
2
Document signing
You’ll sign numerous documents including the promissory note, mortgage/deed of trust, and various disclosures. The settlement agent should explain each document.
3
Funds verification
The title company confirms all funds have been received: your wire transfer and the lender’s loan funding.
4
Closing authorization
Once everything is signed and funds are verified, the transaction is authorized to close.
5
Recording
The title company submits documents to the county for recording. This may happen same-day or next business day depending on timing.
6
Keys released
After recording confirmation (or as specified in your contract), you receive the keys. You’re officially a homeowner.
What to Bring
- Government-issued photo ID (required)
- Certified or cashier’s check if not wiring (confirm acceptable payment methods in advance)
- Any outstanding documentation requested by lender or title company
- Questions about anything you don’t understand
Choosing a Title Company
Research title companies before you write an offer. You have only 3 days to wire earnest money once under contract. What to evaluate:Security protocols
Security protocols
- Wire fraud insurance coverage and amount
- Encrypted portals for document sharing
- Phone verification procedures for wire instructions
- Staff training on fraud prevention
Experience and volume
Experience and volume
- Monthly closing volume
- Years operating in your area
- Familiarity with local recording offices
- On-time closing rate
Closing procedures
Closing procedures
- Who conducts closings (settlement agent vs notary)
- Availability for evening or weekend closings
- Attorney settlements available (if desired)
Communication
Communication
- Responsiveness during initial contact
- Clear explanation of fees and process
- Willingness to answer questions
- Do you carry wire fraud insurance? What’s the coverage amount?
- How do you communicate wire instructions?
- Who will conduct my closing? Can they answer questions about documents?
- What are your fees? Can you provide an itemized breakdown?
Learn More
Title & Escrow Overview
Understanding title company roles and responsibilities
Title Insurance
Complete guide to lender’s and owner’s policies
Wire Fraud Protection
Security protocols and how to protect yourself
Closing Process
Detailed timeline from contract to recording
Earnest Money
How deposits work and when they’re at risk
Title Ownership Options
How to take title: sole, joint tenants, tenants in common
Comparing Title Companies
Questions to ask and evaluation criteria
Consumer Protections
RESPA, TILA, and your rights during closing
Next: Insurance & Moving In
Protecting your investment and getting settled