What is the function of a title company?

• A. To provide the mortgage loan directly to buyers.
• B. To ensure the title is legitimate and clear of claims.
• C. To manage the escrow accounts for buyers.
• D. To provide appraisals for properties.

Answer: (B)

The primary function of a title company is to ensure that the title to a property is legitimate and free of claims or liens. This process is critical in real estate transactions because it protects the buyer and lender from legal issues that could arise if the seller does not have clear ownership of the property. The title company conducts a thorough search of public records to verify the title’s validity, and if any issues are found, they work to resolve them before the transaction is finalized. This ensures that when the property is transferred, the new owner has clear and undisputed rights to it.

Other functions, such as managing escrow accounts or providing appraisals, are typically performed by other entities involved in the real estate transaction. While a title company may handle some aspects of closing, its primary and most important role is focused on confirming the legitimacy of the title.