Texas Real Estate State Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

The primary function of a title company is to provide title insurance and ensure clear title. This involves conducting thorough searches of public records to confirm ownership and identify any potential issues, such as liens or easements, that could affect the property’s title. Title insurance protects buyers and lenders from any losses that may arise due to defects in the title, ensuring that the property is free of legal claims before the transaction is finalized.

In real estate transactions, the security of ownership is crucial; therefore, the role of the title company is integral to facilitating a smooth transfer of property ownership. They also prepare and manage the closing documents, thus acting as a vital intermediary during the closing process.

While options like brokering real estate transactions, appraising properties, or collecting payments on mortgages are functions associated with other professionals in the real estate industry, they do not encapsulate the primary role of a title company. Title companies focus distinctly on title examination and insurance, which are fundamental to safeguarding ownership claims in property transactions.