Purchasing or selling a home is one of the most significant financial transactions most people will make. A key player in ensuring that the process goes smoothly and securely is the title company. Often acting as the settlement agent, the title company is responsible for facilitating various aspects of the closing process. Many of these occur behind the scenes but are critical to protecting the interests of all parties involved.

Read on for an overview of what a title company does during the home closing process and why its role is so essential.

Conducting a Comprehensive Title Search

Before a property can legally transfer ownership, the title company conducts a detailed title search. This involves reviewing public records to confirm the seller has the legal right to convey the property and to identify any potential title issues (defects) that could affect the buyer’s future ownership.

Common issues uncovered during this process may include:

• Outstanding mortgages or liens
• Unpaid property taxes
• Easements, encroachments, or use restrictions
• Judgments or legal claims against the property
• Clerical or recording errors in prior deeds

This research typically begins once the purchase agreement is signed and is an essential step in verifying a clear, marketable title.

Issuing Title Insurance

Once the title is confirmed to be clear, the title company issues title insurance policies — one for the lender and, optionally, one for the buyer:

• Lender’s title insurance is usually required by mortgage lenders and protects their financial interest in the property.
• Owner’s title insurance is optional but highly recommended. It protects the buyer’s financial interest against future property claims or disputes related to title defects.

Title insurance provides an added layer of protection for both buyers and lenders and offers peace of mind long after the transaction is complete.

Preparing and Coordinating Closing Documents

Title companies frequently serve as settlement agents, coordinating and preparing the required documents for closing. This includes:

• The deed transferring property ownership
• Settlement statements
• Affidavits, tax documents, and other required forms

The title company works closely with the lender, real estate agents, attorneys (if applicable), and the buyer or seller to confirm that all documents are accurate, compliant with state and local laws, and ready for execution on closing day.

Managing Escrow and Disbursing Funds

One of the most important responsibilities of the title company is handling escrow funds. This includes receiving and securely managing:

• The buyer’s down payment
• Loan proceeds from the lender
• Any applicable seller credits, taxes, or agent commissions

After verifying the closing terms, the title company disburses the funds in accordance with the settlement statement. In Virginia, these duties are performed in compliance with the Consumer Real Estate Settlement Protection Act (CRESPA), which governs how settlement agents handle client funds and conduct closings.

Conducting the Actual Closing

In addition to preparing documents and managing funds, the title company typically facilitates the actual closing appointment. This is the final step in the home buying or selling process, where the necessary parties sign the final paperwork and officially transfer ownership of the property.

During the closing, the title company’s representative guides the parties through the documents, answers last-minute questions, and ensures all signatures are properly executed. They verify that all required funds have been received and that the settlement statement balances before disbursing payments.

By conducting the closing, the title company acts as a neutral third party to help facilitate a secure and compliant transaction, providing confidence for both buyers and sellers on one of the most important days of the entire process.

Recording the Deed and Legal Documents

Following the closing, the title company makes certain that the deed and, if applicable, the mortgage or deed of trust, are properly recorded with the clerk of the circuit court in the city or county where the property is located. This step is vital to finalizing the legal transfer of ownership and creating a public record of the transaction.

Providing Post-Closing Support

Even after the transaction is complete, title companies remain a valuable resource. Whether addressing questions, resolving minor post-closing issues, or assisting with the title insurance claims process, they help ensure the long-term integrity of the ownership transfer.

Title companies are integral to closing the real estate transaction. To learn more about the title process in Virginia, contact the team at Linear Title & Escrow.