Title Companies and Closing Attorneys

Behind the scenes of every home purchase, someone has to confirm that the seller actually has the legal right to sell the property, and that the transfer of ownership and money happens correctly. That work is typically handled by a title company or a closing attorney, depending on the state.

What a title search does

Before closing, a title search reviews public records to confirm the seller's ownership and to check for liens, unpaid taxes, judgments, or other claims against the property that could affect the buyer's ownership.

Title insurance

Even a careful title search can miss certain issues, such as errors in past records or undisclosed heirs. Title insurance protects against financial loss from these kinds of title defects that surface after closing. There are typically two types: lender's title insurance, which protects the lender, and owner's title insurance, which protects the buyer.

Closing attorney versus title company

In some states, a licensed attorney is required to conduct real estate closings, while in others a title company handles the process without an attorney's involvement. Both fulfill a similar role: preparing closing documents, coordinating the transfer of funds, and ensuring the transaction is properly recorded.

What happens at closing

At closing, the buyer signs loan documents and the deed transfer is finalized, funds are transferred from the buyer and lender to the seller and other parties, such as agents and the seller's existing lender, and the transaction is recorded with the local government office responsible for property records.

Choosing your own provider

In many states, buyers have the right to choose their own title company or closing attorney rather than automatically using whoever the seller's agent or lender suggests. Comparing fees and service, similar to comparing lenders, can be worthwhile, though title insurance rates are regulated in some states and may not vary much between providers.

Common misconceptions

Some buyers assume title insurance is optional or unnecessary, but lenders typically require lender's title insurance, and owner's title insurance, while sometimes optional, protects the buyer's own investment in the property. Others assume the closing attorney represents the buyer's interests the way a personal attorney would, but in many states the closing attorney facilitates the transaction for all parties rather than advocating exclusively for the buyer.

Why this role matters

The work of a title company or closing attorney is easy to overlook because it happens largely behind the scenes, but it is what ultimately confirms that a buyer is receiving clear, legal ownership of the property and that the closing itself is handled accurately and securely. Understanding this role helps buyers ask informed questions as closing day approaches.