# 1 - The Order is Received

A party brings in a real estate contract, commitment letter from a bank or mortgage company, etc. The contract is “receipted” by the title company by acknowledging in writing, the receipt of the contract and any earnest money. Any earnest money is deposited into the title company escrow account.nar dapibus leo.

# 2 - Tax Check

What taxes are owed on the property? The various taxing authorities are contacted to confirm that all taxes have been paid. The base rate for each taxing authority is also obtained so that the current year’s taxes can be prorated between the buyer and the seller.

# 3 - Title Search / Abstracting

Copies of documents relating to the property are gathered from various public records. A complete ownership history of the property is created so the examiner can see a step by step transfer of ownership from its original patent to its current owner.

# 4 - Examination

The examiner follows the flow of ownership evidenced by the documents gathered by the abstractor. The examiner must make sure that each transfer was handled correctly and legally in order for the title company to insure that the new buyer’s claim to ownership is the only claim to the property.

# 5 - Commitment

Once the examiner is satisfied as to ownership and has identified issues affecting the property, a Commitment for Title Insurance is created, signed, and provided to the buyer. The buyer reviews the commitment to make sure that the title company has not uncovered some issue affecting the property that he was not made aware of during purchase negotiations.

# 6 - Settlement

The final duty of the title company is to “close” the transaction. The title company brings all of the involved parties together and oversees the execution of the documents necessary to facilitate the sale, refinancing, etc., and then disburses money to the parties who will receive funds. After closing, the terms of the contract are typically fulfilled and the transaction is complete.

The Fundamentals

People often ask, “Why do we need title insurance?” “How can a title failure occur?”


We have provided these calculators to help you estimate the financial impact of your contemplated transaction.

Other Resources

Everything from Title Quotes, to Seller Net Sheets and Buyer Estimates.