What Does a Title Company Do?

A man in a fancy blue suit writing with a pen on a contract.

If you’ve ever sold a house or even just begun the process of looking into it, you may be familiar with title companies. They represent a necessary step in any home sale, but why is that? What does a title company do exactly, and why do you need one? Let’s take a look at what these companies bring to the table before a closing and see if we can shed some light on why they’re such a key part of the process.

So What Does a Title Company Do Exactly?

Early on in our conversations with sellers, we explain that for any transaction to proceed we will need to bring an Ohio title company into the fold. Since they frequently come back with the question “What does a title company do?” we’ve had some practice explaining it. Before someone can understand what exactly a title company does, however, it’s helpful to know what a title company actually is. With that in mind, here are some key characteristics all title companies should share.

3 Traits of Great Title Companies

a red circle inside of which two hands are shaking with a dollar sign floating above them.

Neutral

At Upward Home Solutions, we work with the team over at PM Title on a regular basis. They have been involved in so many of our closings that we’ve long since lost count. It’s tempting to casually refer to them as “our title company” because we don’t really use anyone else, but of course, they are not ours. Every title company is very much its own entity, and that’s the way it should be.

A title company is a third-party actor in home closings. This separation is necessary to ensure the integrity of the deal. So while we love how PM Title is always willing to help out the sellers we work with (definitely check out Bonnie’s story), we don’t tell them how to do what they do.

What does a title company do? It makes closing your home easier and safer as demonstrated by these four young men in business clothes and ties signing contracts on an eggshell white table.
What does a title company do? It makes sure every transaction is 100% on the level.

Regulated

In order to protect the interests of buyers and sellers, a title company must adhere to special laws when closing a home. They must also check quite a few boxes just to open their doors and start a title insurance company at all. While those state insurance requirements can be a little different from state to state, buyers and sellers can rest assured that there is really no such thing as a “fly by night” or unregulated title company. Ohio’s title insurance laws stipulated way back in 1967 that Columbus, Ohio title companies (the city in which our UHS team operates) must meet a strict definition of what a title company is in order to do business as such.

The government has these types of regulations around how title companies operate for a reason. Property sales involve trust, and this regulation allows all parties to transact much more safely. That leads to the third characteristic we’ve come to expect from the title company we work with.

Consistent

There is no typical day-to-day for our home renovation team. A baseball team, likewise, would be pretty silly to play each of their opponents the exact same way. In some professions, things change based on the circumstances, but that isn’t so much the case for title companies. At least not when it comes to the process that buyers and sellers are a part of.

By the time a title company completes their process and it’s time to close, you can pretty much expect the same thing every time. So what does a title company do? They provide trust, consistency, and safety.

What Does a Title Company Do?

At the end of the day, a title company’s primary job is to coordinate your real estate transaction. After a purchase agreement is signed between the buyer and seller, it gets turned over to the title company. That company then begins coordinating the closing.

During this process, they do the research necessary to verify the status of your title and any liens and they check a variety of other necessary boxes to finalize the home sale.

When it’s closing time (cue the music), your title company will work with you (the seller) to set up a time and place for signing all the final papers. They’ll also coordinate with you on how you want your funds delivered.

Miniature house with a set of keys on a wooden table.

Title companies do a whole variety of things to ensure your home sale is bona fide, safe, and as smooth as possible. If you have any further questions, feel free to give us a ring or learn more about the housing and home sale markets in 2021.