What Is a Title Company in Real Estate?
A title company ensures a property’s ownership is valid and free of legal issues. It conducts a title search, handles closing documents, and provides title insurance to protect buyers and lenders from ownership disputes.
🏡 The Role of a Title Company
The title company acts as a neutral party between buyer and seller. It verifies that the seller legally owns the property and that there are no liens, encumbrances, or claims that could affect the transfer of ownership. Once verified, the title company prepares the deed and manages funds through escrow until closing is complete.
🔍 What Does a Title Company Check?
- Public ownership records and property history
- Existing liens or unpaid taxes
- Easements or restrictions affecting use
- Outstanding mortgages or judgments
- Correct legal description of the property
Once complete, the title company provides a title commitment outlining any issues that must be resolved before closing.
🛡️ Title Insurance Explained
Title insurance protects buyers and lenders from future ownership disputes. It covers losses from recording errors, undisclosed heirs, or fraudulent signatures. Most lenders require it, and it’s typically issued by the title company after reviewing the title search results.
💡 Why FSBO Sellers Need a Title Company
Even if you’re selling FSBO, using a title company simplifies closing and ensures compliance. They prepare the closing documents, distribute funds, and record the new deed with the county once the sale finalizes.
🏠 List FSBO With Confidence
Brokerless helps you list on the MLS while your title company handles the closing. You keep control — and more of your equity.
View Flat Fee MLS Plans❓ Title Company FAQ
1. Who chooses the title company?
Usually the buyer, though both parties can agree. Sellers can also suggest one for convenience.
2. How much does a title company charge?
Costs vary by state and sale price but typically include title search, insurance, and closing fees.
3. Do I need a title company if I sell FSBO?
Yes — they handle escrow, legal recording, and ensure the buyer receives clear ownership.
4. Is a title company the same as a closing agent?
Often, yes. Many title companies also act as the closing agent managing the settlement process.
5. Can I use the same title company as my buyer?
Yes, and doing so can simplify communication and reduce delays in the transaction.
📚 Explore more real estate terms in our What Is in Real Estate glossary.