The title company’s job in one list
In an Ohio home sale, the title company usually handles these jobs, in roughly this order:
- opens a file when it receives the signed purchase agreement and earnest money
- searches the county records for the property’s ownership history, mortgages, liens and taxes
- issues a title commitment saying what must be cleared before it will insure
- orders payoff statements from your lender and any lien holders
- prepares the deed, the settlement statement and other closing documents
- holds the closing and collects signatures
- receives the buyer’s funds and pays everyone from them
- delivers the deed and the DTE 100 to the county auditor and recorder
- files Form 1099-S with the IRS
- issues title insurance to the buyer and any lender
Each step is explained below.
The title search and title commitment
The search confirms you own what you are selling and shows what is attached to it. A searcher reviews recorded deeds, mortgages, judgment liens, mechanics’ liens, tax liens, court cases, unpaid taxes and special assessments on the parcel.
The results come back as a title commitment, which lists the requirements to close. Common ones for sellers:
- pay off and release your mortgage and any home equity line
- release a judgment lien, or pay it from proceeds
- get signatures from every owner on the deed, and in many counties a spouse for dower release
- record a missing document, such as an affidavit or a probate entry
If the search turns up a serious defect, such as a gap in ownership or a claim by a former owner’s heir, the fix may need a court case. Our guide to a quiet title action in Ohio covers that.
Payoffs and liens
The title company asks your lender for a payoff statement, and federal Regulation Z requires the servicer to send one within seven business days of a written request. At closing, the title company wires the payoff from your proceeds.
After that, your lender has a legal duty to clear the record. R.C. 5301.36 says the mortgagee must record a release “within ninety days from the date of the satisfaction.” If it doesn’t, the current owner can send a statutory notice, and a lender that still fails to act within 15 days can owe attorney fees plus $100 a day, up to $5,000. Title companies routinely follow up on releases. See how to get a mortgage payoff statement.
Closing documents, the deed and the conveyance fee
The title company prepares or arranges the paperwork that moves ownership:
- The deed, usually a general warranty deed or a limited warranty deed, with the legal description approved by the county
- The settlement statement, listing every charge and credit for both sides
- Affidavits, such as an owner’s affidavit about liens and possession
- Form DTE 100, the statement of value the county auditor needs under R.C. 319.202
When the deed is delivered to the auditor, the title company pays the county conveyance fee from your proceeds. In Summit County, the property transfer department must receive properly prepared forms before its 3:30 p.m. cutoff for a same-day transfer. Our Ohio conveyance fee guide explains that fee.
Escrow, disbursement and your proceeds
The title company acts as escrow agent. It holds the buyer’s earnest money and closing funds, then disburses them according to the signed settlement statement: payoffs first, then the conveyance fee, taxes, commissions and other charges, and finally your net proceeds.
Because it moves large sums by wire, it is a favorite target of email fraud. The FBI’s Internet Crime Complaint Center recommends using “secondary channels or two-factor authentication to verify requests for changes in account information.” Call the title company at a number you already have before you send or accept any wiring instructions. Our closing wire fraud guide has more.
Reporting the sale to the IRS
Most home sales are reported on Form 1099-S, and the IRS assigns that duty to “the person responsible for closing the transaction,” normally the settlement agent named on the Closing Disclosure. The title company will ask for your taxpayer ID before closing, and you must provide a complete, non-truncated number.
Some sales of a main home for $250,000 or less ($500,000 for married sellers) don’t need a 1099-S if you sign a written certification that the whole gain is excludable. See Form 1099-S when selling a house.
When the title company finds a problem
If the search finds an issue, the title company lists it as a requirement in the commitment and tells everyone what it needs. Some fixes are routine, like collecting a lien payoff, getting a missing signature, or recording a release. Others need help from outside the title company, such as an estate filing or a court action. The sooner you see the commitment, the more time you have to clear what it lists.
What a title company does not do
The title company is neutral. It does not represent you or the buyer, negotiate your contract, or tell you whether a term is good for you. Ohio’s license law also says a real estate license doesn’t authorize “any service constituting the practice of law,” and the same practical limit applies at the closing table.
If you need advice on a contract, an estate, a divorce decree or a title dispute, hire an attorney. When we buy a house, we close through a local title company, which handles the title search, the paperwork and your payment; you can read how the process works start to finish.
