A real estate title company ensures that the title to a piece of property has no title issues for the company to issue title insurance for that property. Title insurance protects the lender and owner against claims or lawsuits from a dispute over title.
Title companies sometimes maintain escrow accounts, which contain funds that are needed to close on the sale of property. The account maintained by the title insurance company ensures the money is only used for closing and settlement costs, and the title insurance company may also conduct the closing on the property. Title insurance companies also ensure that the new deeds, titles and other documents are filed with the filing agency.
To make sure the property title is legal, the title company does a title search, which is a complete examination of the property records. The title company looks to ensure that the individual claiming to own the property actually does own the property. The company looks for outstanding liens, mortgages, judgements or unpaid taxes that may be attached to the property. The title company also looks for easements, restrictions or leases that may impact the legal ownership of the property. Title companies may also require a survey be done, which can determine the boundaries of the plot of land that the home sits on.