16 Feb What Does a Title Company Do at Closing?
What Does a Title Company Actually Do at Closing? (Step-by-Step Guide in Tennessee)
If you’re buying or selling a home in Tullahoma, McMinnville, Fayetteville, Winchester, Shelbyville, or Lewisburg, you’ll likely hear the phrase “title company” several times before closing day.
But what does a title company actually do?
At its core, a title company is a neutral third party. It protects everyone in the transaction, including the buyer, seller, lender, and agents. It also ensures the legal transfer of ownership is done correctly. From researching property history to coordinating funds and recording documents, the title company handles key tasks. It works behind the scenes to help closing day go smoothly.
Here’s what that process looks like step-by-step.
Step 1: Title Search & Examination
Before you ever sit down at the closing table, a detailed title search is conducted. This means researching public records to confirm that the seller truly owns the property and has the legal right to transfer it.
During this process, we examine records for outstanding mortgages, unpaid property taxes, judgments, liens, easements, restrictions, and even clerical errors from past recordings. In counties like Coffee County, Warren County, and Lincoln County, understanding how records are filed locally can make a meaningful difference in efficiency and accuracy. The goal is simple: confirm the property has a clear, marketable title before ownership changes hands.
Step 2: Clearing Title Issues
If something is discovered during the title search , often referred to as a “cloud on title,” it must be resolved before closing can move forward.
Common issues include unreleased prior mortgages, unpaid contractor liens, boundary discrepancies, or documentation errors.
When this happens, the title company works with lenders, attorneys, or past parties.
They get the needed releases or corrected documents.
This step is very important in the process.
Unresolved title issues can delay or stop a closing.
Step 3: Issuing Title Insurance
Once the title is verified as clear or properly corrected, title insurance is issued. Unlike other insurance that covers future events, title insurance covers past issues.
These issues may not have been found during the title search.
There are typically two policies involved in a financed transaction. The lender’s policy protects the mortgage company’s financial interest, while the owner’s policy protects the buyer’s ownership rights. This coverage can safeguard against issues such as undisclosed heirs, forged documents, or recording mistakes that surface after closing.
Step 4: Preparing the Closing Documents
As closing approaches, the title company prepares the documents necessary to legally transfer ownership. This includes drafting the deed, coordinating payoff statements, preparing settlement statements, and working alongside the lender to finalize loan documents.
Accuracy and timing are critical here, especially in financed transactions where federal disclosure requirements apply. Even small discrepancies can delay funding, which is why this stage requires careful coordination between all parties involved.
Step 5: Coordinating With the Lender and Real Estate Agents
A smooth closing doesn’t happen by accident — it happens through communication.
Behind the scenes, the title company works closely with the lender to confirm final loan numbers and funding approval. At the same time, we coordinate with both the buyer’s and seller’s agents to schedule the closing, confirm required documents, and ensure everyone knows what to bring to the table. Clear communication helps prevent last-minute surprises and keeps the transaction on schedule.
Step 6: The Closing Appointment
On closing day, buyers and sellers meet to sign the necessary documents. During this appointment, the title company reviews the paperwork, answers final questions, notarizes signatures, and confirms receipt of funds.
Depending on the transaction, this may happen in-office, through a mobile closing, or via Remote Online Notarization (RON) when eligible. The appointment itself typically lasts between 30 and 60 minutes but it represents weeks of preparation behind the scenes.
Step 7: Recording and Finalizing the Transaction
After documents are signed and funds are confirmed, the final step is recording the deed with the county. Recording officially transfers ownership from the seller to the buyer.
Only after recording occurs are funds disbursed and the transaction considered complete. At that point, the buyer legally owns the property.
Why Working With a Local Title Company Matters
Real estate is local. And so is title work.
Working with a title company familiar with Tullahoma, McMinnville, Fayetteville, Winchester, Shelbyville, and Lewisburg means you’re partnering with a team that understands local property history, county recording procedures, and community relationships. That experience can make a difference in resolving issues quickly and keeping transactions on track.
At the closing table, confidence matters. And preparation behind the scenes makes all the difference.
