How to Choose a Title Company
Apr 20, 2023 | Realtor Resources | Share:
If you’re not a title industry insider, it may seem like all title and closing companies are the same. But there are actually a number of things that differentiate title companies from one another.
Because a title company is a key part of your real estate transactions, you need to make an educated choice that’s going to serve you and your clients well. But how do you know what to look for?
Here are five things to consider when choosing a title and closing company.
Why Your Choice of Title Company Matters
A title company isn’t a commodity. While all reputable title insurance underwriters will provide the coverage needed to protect a lender or homeowner from hidden risks to their title, the companies that provide that title insurance can be vastly different from one another. And the title company plays a significant role throughout the real estate transaction.
The title company handles all of the behind-the-scenes work required to secure title insurance, such as performing a title search and exam, issuing a title commitment, and clearing any title issues prior to closing. They’re also responsible for preparing all of the documents for closing, ensuring that all funds are delivered after closing, and transferring legal ownership from the seller to the buyer.
After a home goes under contract, much of what happens before closing is outside a realtor's or homeowner’s control. You need a title company that you can trust to manage all of the details necessary for closing and to create a positive closing experience for your clients. But how do you know which title companies are worthy of that trust?
How to Choose a Title Company
As a realtor, you want to protect your clients as well as your reputation when you choose a title company. But choosing a title company can be complicated. To make that decision a little easier, start by considering these five factors.
One of the most important things to consider when choosing a title company is the company’s reputation. Because the title company issues title insurance, you want to ensure that it’s an agent of a reputable insurance company. If you’ve never heard of the title insurance underwriter, do a little investigation. The underwriter should have a history of service; for example, Stewart Title and Chicago Title can trace their respective histories back over 100 years. The title company should be able to answer any questions you have about their underwriter.
Another good indicator that you’re working with a reputable title company is ALTA membership. ALTA, the American Land Title Association, is an association of title companies that provides policy leadership and ensures that affiliated companies meet professional and ethical standards for safe and efficient real estate transactions.
Local reputation also matters, because the title company’s reputation will also impact your clients’ perceptions. If the title company fumbles a key part of the transaction or is the reason for unnecessary delays, your client may hold you responsible. Talk to other realtors about title companies they trust. Most will provide candid answers about their experiences.
While Google reviews can be helpful, you should be wary of basing your entire decision on online reviews. In some cases, the title company will be blamed for things that are outside of its control, so always consider these reviews carefully.
Communication is key to any professional or personal relationship, and your relationship with a title company is no different. When working with a title company, you want to find one that provides clear, honest, and helpful communication throughout the entire title and closing process.
You can tell a lot about how a title company will communicate with clients through observation. How they answer the phone, respond to questions, and communicate with one another in the office will reveal much about the organization’s priorities and values. You should always choose a title company that communicates respectfully, promptly, and compassionately.
A key element of communication is setting clear expectations. The title company you choose should be upfront about timelines and any documentation that will be required. They should also communicate with you how to obtain updates on the status of your file. Some title companies will have specific tools for communication, such as Qualia Connect, to securely communicate with clients prior to closing.
You also want to find a title company that is available when you need them. Once you order your title search and schedule a closing, you should have a specific point of contact (rather than just the office phone number) in the event of questions, changes, or concerns. And since not all issues happen during regular business hours, there should be some way to contact your title company in the evenings or on weekends.
Real estate transactions involve the transfer of large sums of money, so it’s essential to find a title company that is committed to keeping that money safe and protecting its clients from wire fraud. While wire fraud may seem like something that only happens to “other people”, wire fraud attempts are on the rise and are growing more and more sophisticated. According to a recent ALTA survey, 1 in 3 real estate transactions was the subject of attempted wire fraud.
To truly protect clients from wire fraud, your title company needs to be proactively fighting fraud and educating clients about its risks. Your title company should be able to provide specific and detailed information about what they’re doing to combat wire fraud.
An effective strategy for fighting wire fraud should include several strategies, including the use of education, best practices and procedures, technology, and encryption. Every client should be educated on the reality and risks of wire fraud and informed of the procedures taken to minimize those risks. Title companies should also utilize secure technology such as CertifID to verify wiring instructions and provide additional safeguards to their clients. At a minimum, all digital communication from the title company should be encrypted.
Because wire fraud is always evolving and adapting, title companies should be constantly evaluating their fraud prevention strategy. Avoid title companies that minimize or ignore the risk of wire fraud associated with real estate transactions.
Location and Convenience
A title company may be amazing, but if it’s located an hour away, it’s going to be difficult to schedule closings that work with your schedule. When looking for a title company, you’ll want to find a location that’s convenient for both you and your clients.
Buying or selling a home is stressful enough: you don’t need to add an inconvenient or out-of-the-way location to your closing day checklist. Many title companies feature multiple locations, so you can simply choose the location near you for your closing.
You’ll also want to ask your title company if they offer any flexible closing options. Some customers may need the option to close before or after regular business hours, while others may be unable to drive to the closing due to health conditions or unexpected travel arrangements. Knowing that your title company can adapt to surprises or can accommodate special cases can provide peace of mind to you and your clients. Many title companies will offer remote closings, flexible closing hours, travel closings, and mail-away closings by request.
Never underestimate the value of a title company that is present in and invested in the local community. Locally owned and operated title companies have the advantage of being familiar with the community and real estate landscape: every county has its own quirks and peculiarities. Since title searches are conducted within that local community, this familiarity ensures a more accurate title search and exam and processes that are adapted to local needs.
You should also be on the lookout for a title company that’s willing to support the local real estate community through education and partnerships. Most realtors aren’t naturally familiar with the ins and outs of title insurance, but educated realtors are better able to serve their clients and meet their needs. Title companies are perfectly positioned to provide that education and support. Title companies may also partner with realtors in supporting local realtor associations, providing fun social opportunities, or supporting realtor passion projects.
Title companies are also positioned to give back to the communities where they operate. Giving back through local sponsorships, fundraising, and community service reflects a deep investment in the community.
Choosing Your Title Company
When choosing a title and closing company, don’t be afraid to talk with others and do your homework. Whether you’re new to the area, a new realtor, or just looking for a new partnership, you should be able to gather information about a prospective title company through a little research and by talking with other realtors or lenders in the area.
But don’t be afraid to ask your title company any questions you may have. They should be willing and able to answer your questions and address any of your concerns at any point in your relationship – whether you’ve never worked with a title company before or you’re a long-time partner.
At South Oak, we’re dedicated to providing outstanding service to our title and closing clients in Alabama, Florida, and Tennessee. We’re always happy to answer your questions; feel free to contact us 24/7 using our online form. You can also order a title or schedule a closing online today.