What Does a Title Company Do When You Buy a Home in Florida?

Most buyers meet their real estate agent and their lender early. The title company shows up later, usually as an email asking for an escrow deposit. Then, on closing day, it's the title company sitting across the table with a stack of documents and your keys.

So what happens in between? Here is what a Florida title company does for you as a buyer, in the order it happens, and what you can do to help.

First, what "title" means

Title is your legal ownership of the property. The deed is the document that transfers it. "Clear title" means nobody else has a claim that could interfere with your ownership: no unpaid mortgage from the seller, no contractor lien, no heir who never signed off.

The title company's job is to make sure you get clear title, insure it, and handle the money and documents so the transfer happens correctly. If you want the longer version, our post What Is a Title in Real Estate? goes deeper.

1. Holding your escrow deposit

After your offer is accepted, the contract usually gives you a few days to deliver your earnest money, called the escrow deposit in Florida contracts. If the title company is the escrow agent, your deposit goes into its trust account and stays there until closing, or until the contract says it goes back to you or to the seller.

Before you wire anything, call the title company at a phone number you find yourself (on their website, not in an email) and confirm the wiring instructions. Wire fraud targeting home buyers is real and common. We never change wiring instructions by email.

2. Searching the title

Next, the title company searches the public records for the property and the seller. We are looking for:

• Who actually owns the property, and whether everyone needed to sign is available

• Mortgages and home equity lines that must be paid off

• Judgments and liens against the seller

• Unpaid property taxes or tax certificates

• Easements, restrictions and HOA covenants that come with the property

At American Title Trust, most searches are done within 24 to 48 hours. When needed, we also order a municipal lien search, which checks for open permits, code violations and unpaid city utility bills that may not show up in the official records. Our post on the importance of a title search explains more.

3. Issuing the title commitment

The search results become a title commitment, which is the title insurer's promise to issue a policy once certain requirements are met. Your agent should go over it with you. The two parts that matter most:

• Requirements: what has to happen before closing, such as paying off the seller's mortgage or getting a signature from the seller's spouse.

• Exceptions: things the title policy will not cover. Some are standard, like utility easements. Others may be worth a question.

Under the standard Florida contract, if the commitment shows a title defect, the seller usually has a period of time to fix it. That is one reason the search happens early.

4. Clearing problems before you close

This is the part buyers rarely see. If the search finds an old mortgage that was paid off but never released, we track down the lender for a release. If there is a lien, we arrange for it to be paid from the seller's proceeds. If the owner passed away, we work with the estate's attorney on what's needed.

We also request the estoppel certificate from the HOA or condo association. It tells us exactly what the seller owes the association, so those dues get paid at closing and don't become your problem.

5. Issuing your title insurance

In Florida you'll typically see two policies:

• Lender's policy: required if you have a mortgage. It protects the lender, and the buyer pays for it.

• Owner's policy: protects you for as long as you own the home. In most Florida counties, including the Orlando area, the seller customarily pays for it. In Miami-Dade, Broward, Sarasota and Collier, the buyer customarily pays. Your contract decides.

Title insurance premiums in Florida are set by the state, so they are the same at every title company. You pay once, at closing. There is no monthly premium. Learn who pays for each policy in Who Pays for Title Insurance in Florida?

6. Working with your lender on the numbers

If you have a loan, the title company and your lender work together on the final figures. Your lender sends the Closing Disclosure, which you must receive at least three business days before closing. The title company prepares the settlement statement that shows every dollar coming in and going out, including your share of the property taxes, recording fees and the Florida taxes on your mortgage.

Wondering what all of that adds up to? Read Florida Buyer Closing Costs Explained.

7. Running the closing

On closing day, the title company:

• Checks everyone's ID

• Explains and notarizes your documents

• Confirms your closing funds were received

• Gets the lender's authorization to fund

• Records your deed and mortgage with the county

• Pays off the seller's mortgage, the HOA, the agents and everyone else on the settlement statement

The signing usually takes about an hour. If you can't be there in person, ask about mobile or remote closings.

8. After closing

After your deed records, the title company issues your final owner's title policy. Keep it with your deed and closing papers. If a covered title problem ever comes up, that policy is what you'll use to file a claim.

How you can help your closing go smoothly

• Send your escrow deposit on time, after confirming instructions by phone

• Answer questions from your lender and title company quickly

• Bind your homeowner's insurance early

• Don't open new credit or make big purchases before closing

• Bring a valid, unexpired photo ID

• Wire closing funds a day early if you can

Working with American Title Trust

We're a woman-owned title company headquartered in Orlando, and we close home purchases throughout Florida. Our founder provides first-time homebuyer education across Central Florida, so we're used to questions, and we like them. Hablamos español, so if you'd rather go through your documents in Spanish, just ask.

Buying a home in Florida? Visit amtitletrust.com or call 888-848-5320.

FAQ

Do I need a title company to buy a house in Florida?

Florida doesn't legally require one, but lenders require a lender's title policy, and almost all purchases are closed by a title company or a real estate attorney who handles the search, title insurance, escrow and recording.

Who chooses the title company in Florida?

Under the standard Florida contract, the party paying for the owner's title policy designates the closing agent. In most counties that's the seller, but it's negotiable.

How long does the title process take?

The search itself often takes 24 to 48 hours. Clearing any problems and coordinating with the lender happens during the rest of the contract period, typically 30 to 45 days for a financed purchase.

This article is for general information only and is not legal, tax, or financial advice. Laws and rates change, and every transaction is different. Please consult a Florida-licensed attorney, CPA, or other qualified professional about your situation. American Title Trust, LLC is a Florida-licensed title insurance agency (License W373227), not a law firm. Title insurance is underwritten by WFG National Title Insurance Company. Florida title insurance premiums are set by the State of Florida. Information current as of the date published above.