What Does a Title Company Actually Do? A Florida Home Buyer's Guide
If you are buying a home in Florida, you will work with a title company at closing. But what exactly does a title company do, and why does it matter who you choose? This guide explains the role of the title company in plain language.
What Is a Title Company?
When you purchase real estate in Florida, the title company serves as the neutral third party that manages the closing process. It is the organization responsible for ensuring that the property you are buying has a clear legal title, that all funds are handled correctly, and that the transaction is properly recorded with the county.
In simple terms, the title company makes sure the seller has the legal right to sell the property, and that you will receive clean, unencumbered ownership when the transaction is complete.
The Core Functions of a Title Company
Title Search
Before any closing can take place, the title company conducts a thorough search of public records going back at least 30 years, and often 50 years or more. This search examines deeds, mortgages, liens, judgments, tax records, and other documents to trace the complete chain of ownership and identify any potential defects.
A title defect is anything in the property's history that could cloud your ownership or create a legal claim against the property. Common defects include unpaid liens, unreleased mortgages, boundary disputes, errors in prior deeds, and claims from unknown heirs.
Title Insurance
After the title search is complete, the title company issues title insurance policies. There are two types: the lender's policy, which protects the mortgage lender, and the owner's policy, which protects you as the buyer.
Title insurance is a one-time premium paid at closing that provides permanent protection against covered title defects. If a covered issue surfaces after closing, the title insurance company will defend your ownership and cover your financial losses up to the policy amount.
In Sarasota County, the buyer customarily pays for the owner's title insurance policy and typically selects the title company.
Escrow and Closing
The title company also serves as the escrow agent for the transaction. This means it holds all funds in a neutral account until all conditions of the sale are met. At closing, the title company collects the buyer's funds, pays off any existing mortgages on the property, disburses the seller's proceeds, and pays all closing costs to the appropriate parties.
The title company prepares all closing documents, coordinates the signing, and records the new deed with the county clerk after closing is complete.
What Happens at the Closing Table
On closing day, you will sit down with the title company's closing agent to sign a stack of documents. These include the deed transferring ownership to you, the settlement statement showing all financial details of the transaction, and, if you have a mortgage, a large number of lender-required documents.
The closing agent will walk you through each document, explain what you are signing, and answer your questions. Once all documents are signed and funds are confirmed, the closing agent will record the deed and disburse the funds.
Why Does It Matter Who You Choose?
Not all title companies are the same. In Florida, title companies are licensed and regulated, but the level of expertise and attention to detail varies significantly. Choosing a title company founded and led by a practicing real estate attorney means every transaction benefits from legal oversight that goes beyond the standard title review.
At Closing Pros LLC in Sarasota, attorney John Wickman, Esq. brings decades of real estate law experience to every closing. When a title issue arises, it is handled by someone with the legal training to resolve it quickly and correctly, rather than being escalated to an outside attorney at additional cost and delay to you.
Frequently Asked Questions
What does a title company do at closing? The title company prepares all closing documents, verifies that the seller has clear legal title to the property, collects and disburses all funds, and records the new deed with the county clerk. At Closing Pros LLC, a licensed real estate attorney reviews every transaction.
How long does a title search take in Florida? A standard title search in Florida typically takes 3 to 5 business days, though this can vary depending on the complexity of the property's history and how quickly public records can be accessed.
Do I need a title company to buy a home in Florida? Yes. Florida law requires that a licensed title agent or attorney handle the closing and issue title insurance. The title company also serves as the neutral escrow agent that holds and disburses closing funds.
Who pays for the title company in Florida? In Sarasota County, the buyer customarily pays for the owner's title insurance policy and typically selects the title company. This varies by county across Florida. The allocation of fees is always negotiable and should be confirmed in your purchase contract.
Is Closing Pros LLC a law firm? Closing Pros LLC is a title company founded and led by John Wickman, Esq., a licensed Florida real estate attorney. While Closing Pros LLC operates as a title company, the attorney oversight on every transaction provides a level of legal expertise that most title companies cannot offer.
Ready to Get Started?
If you are buying or selling a home in Sarasota or the surrounding areas, Closing Pros LLC is here to guide you through every step of the closing process. Contact us today to request a quote or schedule a consultation.
Closing Pros LLC | 46 N Washington Blvd, Suite 15, Sarasota, FL 34236 | Phone: (941) 933-7767 | Email: [email protected]
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