What Exactly Does a Title Company Do—And Why Should You Care?

If you've ever bought or sold a home, chances are a title company was involved. But many buyers and sellers don’t fully understand what title companies actually do—and how they protect your investment.

Let’s pull back the curtain.

What Is a Title Company?

A title company’s primary job is to make sure the property being bought or sold has a clean and clear ownership history. In other words: they confirm that the seller actually owns the home—and that no one else can make a claim on it.

They also issue something called title insurance, which protects both the buyer and the lender in case any ownership issues pop up down the road.

What Title Companies Do During a Real Estate Transaction

1. Run a Title Search

This is a deep dive into public records to confirm who legally owns the home and whether there are:

• Unpaid property taxes
• Mechanics’ liens from contractors
• HOA liens for unpaid dues
• Child or spousal support liens
• IRS or state tax liens
• Judgments from lawsuits
• Easements or encroachments

2. Flag and Help Resolve Title Issues

If something problematic shows up, the title company notifies the appropriate parties—usually the seller and their agent or attorney. While title companies do not have the legal authority to clear liens themselves, they help coordinate the removal process.

That might include:

• Ensuring the seller pays off outstanding debts before closing
• Collecting payoff demands from creditors
• Requiring lien releases or satisfactions to be recorded

Important: A title company will not insure the transaction until these issues are resolved.

3. Issue Title Insurance

Once the title is clear, the company issues two policies:

• One for the buyer (optional but highly recommended)
• One for the lender (required if you have a mortgage)

These policies protect against future claims or hidden issues that may not show up in a public record search.

4. Support Escrow and Closing

The title company often works hand-in-hand with the escrow officer to ensure all documents are properly recorded and funds are disbursed only when everything is verified.

What Title Companies Can’t Do

While they are vital to the transaction, title companies aren’t miracle workers or legal fixers. Here’s what they don’t do:

• They do not provide legal advice—you’ll need a real estate attorney for that.
• They can’t remove liens or negotiate payoffs—they simply confirm whether liens are cleared or not.
• They won’t insure a clouded title—unless it’s resolved, the deal can’t close.

Understanding these limitations helps avoid confusion and allows you to take action early if something on the title needs attention.

Why It Matters in the Coachella Valley

With so many homes in the Valley changing hands over decades—and sometimes through trusts, foreclosures, or estates—it’s crucial to verify that the chain of title is clean and complete.

A good title company helps prevent major headaches, legal issues, and financial losses that could surface after you thought the deal was done.

Bottom line: Title companies aren’t just paperwork processors—they’re your frontline protection against ownership surprises.

Have questions about title insurance, liens, or ownership issues? I’ve seen it all and can help you connect with trusted title experts here in the Coachella Valley.

Reach out anytime for guidance or referrals.