What Does a Title Company Do? Search, Insurance and Closing Explained
What a title company does: searches records, clears defects, issues a commitment and policy, and may run the closing. How it differs from an automated search.
Quick answer
What does a title company do? It searches public records for the history of a property, examines what it finds, clears problems it can, issues a title insurance commitment and policy, and often handles the closing and the disbursement of funds. It protects the buyer and lender from title defects; it does not inspect the house.
What does a title company do?
A title company stands between the public record and a real estate closing. Before money changes hands, it checks who owns the property and what claims are recorded against it. After that check, it can promise, through insurance, to cover certain losses if a covered defect turns up later.
The work breaks into five functions: search, examination, commitment, insurance and closing. Not every company does all five, and the legal labels differ from state to state. In Florida, for example, the law separates "primary title services" from "closing services" and from the title search itself, as the next sections show.
This guide covers the title side. For the role of the neutral third party who holds money and documents, see what is escrow, which explains escrow agents and how they differ from title companies.
Definition
Title company — A business that researches the recorded history of a property, evaluates whether the title can be insured, issues title insurance, and in many transactions also conducts the closing.
How does a title company work, step by step?
A typical transaction moves through the five functions in this order. The labels below are plain descriptions of the work, not a legal checklist for any one state.
1. Title search
The company compiles records about the property: deeds, mortgages, releases, liens, judgments, tax records and court filings. Florida defines "title search" as "the compiling of title information from official or public records."
2. Title examination
A person with underwriting training reads what the search found and decides whether the title can be insured. They look for gaps in the chain of title, unreleased mortgages, open liens and mismatched names or legal descriptions.
3. Curing defects
Problems that can be fixed are listed as requirements: record a missing release, pay off a lien, correct a deed. Florida describes this as "determination and clearance of underwriting objections and requirements to eliminate risk."
4. Title commitment
The company issues a written commitment. Florida defines primary title services to include "preparation and issuance of a title insurance commitment setting forth the requirements to insure." It is a promise to issue a policy once the listed requirements are met, with exceptions the policy will not cover.
5. Closing and policy
At closing, documents are signed, funds are collected and disbursed, the deed and mortgage are recorded, and the owner and lender policies are issued. Many title companies act as the closing agent for the whole transaction.
What are the functions of a title company?
The table sets the five functions side by side. The Florida statute treats some of them as separate services that can carry separate charges.
| Function | What happens | Output you can see |
|---|---|---|
| Search | Records about the property are compiled from official sources | A search report or abstract of what is recorded |
| Examination | An underwriter judges whether the title is insurable and what must be cleared | Requirements and exceptions |
| Commitment | The company states the terms on which it will insure | A title commitment |
| Insurance | A policy covers covered losses from defects, for the buyer (owner policy) and the lender (lender policy) | Owner and lender policies |
| Closing | Documents are signed, money is disbursed, documents are recorded | Settlement statement, recorded deed and mortgage |
What does a title company do for the buyer?
For a buyer, a title company checks that the seller can actually transfer the property and that the buyer will not inherit unpaid debts attached to it. It then offers an owner policy, a separate contract that can pay for covered losses from defects the search did not find, such as a forged deed or an unrecorded claim.
The lender requires its own protection, so the lender policy is a second policy for the lender, not for the buyer. The buyer does not get the lender policy's protection. This is why people hear about two policies in one purchase.
A title company does not inspect the house, appraise it, or give legal advice. Those jobs belong to an inspector, an appraiser and an attorney. For the full line between searching and insuring, read title search vs title insurance.
How is a title company different from an automated records search?
A title company produces an insurable opinion and a policy. An automated records search compiles recorded documents into a report and stops there. It is not insurance, not an underwriting decision and not legal advice.
The difference is judgment and risk. Under the Florida definition quoted above, primary title services involve "determining insurability in accordance with sound underwriting practices based upon evaluation of a reasonable title search." The search is the input. The evaluation, the clearing of objections and the insurance promise are what the title company adds.
An automated report can be fast and cheap, and it is useful for questions like who the current owner is and which mortgages look open. It cannot, by itself, insure you or fix a defect. The automated title search limits guide lists what a records-only report can miss.
Title company vs automated records search
| Title company | Automated records search | |
|---|---|---|
| Compiles recorded documents | Yes | Yes |
| Underwriter decides if title is insurable | Yes | No |
| Lists requirements to clear defects | Yes, in a commitment | No |
| Issues title insurance | Yes (or an agent for an insurer) | No |
| Handles closing and funds | Often | No |
| Legal advice | No (an attorney gives legal advice) | No |
Who pays for a title company?
On a financed purchase, title charges appear as closing costs on the Loan Estimate and are generally paid at closing. The Consumer Financial Protection Bureau says the largest third-party costs are title services: "Title services include title insurance, title search, and other costs and services associated with issuing title insurance." In most parts of the country, it adds, they also include the fee for the closing agent.
The CFPB also says you can shop for many of these services, using the Loan Estimate to see which ones. It notes that lenders or agents may recommend providers they have a relationship with, and that those providers might not offer the best deal (CFPB, shop for title insurance and other closing services).
The pages we fetched do not set one national rule on whether buyer or seller pays each item. That is decided by the purchase contract and local practice, so read the Loan Estimate and the contract. One rule is national: the federal law at 12 U.S.C. 2608 bars a seller of property bought with a federally related mortgage loan from requiring, as a condition of the sale, that the buyer purchase title insurance from "any particular title company."
Who regulates a title company in Texas and Florida?
Title insurance is regulated by the states, not by one federal agency. The two states below show what that looks like.
| State | Regulator | What the fetched page shows |
|---|---|---|
| Texas | Texas Department of Insurance (TDI) | TDI publishes a Title Insurance Basic Manual with rate rules and insuring forms, and a Guaranty Fee Charge of $3.00 on each owner and lender title insurance policy for closings after September 30, 2026. |
| Florida | Florida statute, Fla. Stat. 627.7711 (Chapter 627, Insurance Rates and Contracts) | Defines closing services, primary title services, title search and premium. Primary title services "do not include closing services or title searches, for which a separate charge or separate charges may be made." |
Why does a title company need public records?
Every function above depends on documents that were recorded with a county office. A title company cannot insure a property it has not examined, and it examines what the public record shows.
Each of those documents is something a searcher may need to read. A deed moves ownership, a mortgage creates a claim, and a satisfaction ends one. For how to read them, see how to do a title search.
What a title company does not do
Where HeritageDeed fits
HeritageDeed provides records searches, not title insurance and not closing services. A Current Owner Search is $49, a Two Owner Search is $79 and a 30-Year Search is $129, in the counties on the title search coverage page. A search compiles recorded documents; it does not underwrite, insure or give legal advice.
Key takeaways
Key takeaways
- A title company searches records, examines the results, issues a commitment and policy, and often runs the closing.
- The owner policy protects the buyer and the lender policy protects the lender. They are two separate contracts.
- An automated records search compiles documents. It does not decide insurability, clear defects or insure anything.
- The CFPB says title services are the largest third-party closing costs and that you can often shop for them.
- Federal law bars a seller from requiring a particular title company when a federally related mortgage loan is used.
- Regulation is state by state: the Texas Department of Insurance and Florida's statute are two examples.
Frequently asked questions
- What does a title company do?
- A title company researches the recorded history of a property, examines the results to see whether the title can be insured, issues a title commitment and insurance policy, and frequently serves as the closing agent who collects and disburses funds and records the documents.
- What does a title company do for the buyer?
- It checks who owns the property and what debts or claims are recorded against it, lists problems that must be cleared before closing, and offers an owner title insurance policy. It does not inspect the home, appraise it, or give legal advice.
- Do I need a title company to buy a house?
- Someone must search and examine the title, and a lender will normally require lender title insurance. Whether that is a title company, an attorney or an agent depends on the state. Check your state's practice and ask your lender what it requires.
- Who pays for the title company, the buyer or the seller?
- It depends on the contract and local practice. The CFPB says title services are the largest third-party closing cost and that you can often shop for them. Check section C of your Loan Estimate and your purchase contract for who pays each item.
- Can the seller make me use their title company?
- Not when a federally related mortgage loan is used. Under 12 U.S.C. 2608, a seller may not require, as a condition of the sale, that the buyer buy title insurance from any particular title company, and violators owe the buyer three times the charges.
- What is the difference between a title company and an escrow company?
- A title company searches the records and insures the title. An escrow company or escrow agent holds money and documents until the deal conditions are met. Our escrow guide covers how the two roles differ.
- Is a title search the same as title insurance?
- No. A title search compiles recorded information. Title insurance is a contract that pays for covered losses from title defects. Florida law even treats the title search as separate from the primary title services that lead to a commitment and policy.
- Who regulates title companies?
- States do. In Texas, the Texas Department of Insurance publishes the title insurance rules and rates. In Florida, Chapter 627 of the statutes defines title insurance terms such as closing services and title search. Other states have their own regulators and rules.
Sources
Primary records and official documentation cited in this article.
HeritageDeed provides public-record search reports only. Reports do not constitute title insurance, an attorney opinion of title, or a title insurance commitment.