ALTA Practice Exam – Complete Prep Resource

The title company plays a crucial role in a real estate closing by ensuring that the transaction is completed properly and issuing title insurance. Title companies are responsible for conducting a thorough examination of the property's title history to ensure that the title is clear of any liens, encumbrances, or other issues that could affect ownership. This due diligence helps protect both the buyer and the lender against potential ownership disputes or claims against the property in the future.

Once the title search is completed and any issues are resolved, the title company will also facilitate the closing process by preparing necessary documents, holding escrow funds, and coordinating with all parties involved, such as the buyer, seller, and lenders. After the transaction closes, the title company issues title insurance, providing peace of mind and financial protection to the new owners against any unforeseen title problems that may arise later.

In this context, it’s clear why the title company’s role is essential in ensuring a smooth transaction and offering protection through title insurance, thus reinforcing the validity of the choice concerning the title company’s responsibilities.