Buying or selling real estate is one of the most significant financial decisions many people make in their lives. From negotiating the sale price to securing financing, each step involves a series of complex legal and financial procedures. One of the most critical steps in this process is choosing the right title company. Title companies are responsible for verifying the property’s ownership history, ensuring there are no legal claims or liens, issuing title insurance, and facilitating the closing process.
Choosing the wrong title company can delay the transaction, cost you money, or even expose you to legal risk. That’s why it’s crucial to vet any title company thoroughly before committing. Here are key questions to ask before selecting a title company.
1. Are You Licensed and Insured?
The first question to ask is whether the title company is appropriately licensed and insured to operate in your state. Title companies must be authorized by the state’s Department of Insurance or relevant regulatory authority. They also need to carry Errors and Omissions (E&O) insurance and fidelity bonds to protect against mistakes and fraudulent activities.
Tip: You can verify their license status through your state’s insurance department website.
2. What Is Your Experience in the Local Market?
Real estate laws and procedures vary from state to state, and sometimes even from county to county. Choosing a title company with experience in your specific market ensures that the professionals handling your transaction are familiar with the nuances of local regulations and practices. Ask how long they’ve been in business and how many closings they handle on a monthly or annual basis in your area.
Why it matters: A local, experienced title company can streamline your closing and avoid costly mistakes due to unfamiliarity with local laws and regulations.
3. Can You Provide a Fee Sheet or Estimate?
Title company fees can vary widely, and transparency is critical. Ask for a detailed fee sheet or quote that includes:
- Title search fees
- Title insurance premiums
- Closing fees
- Wire transfer fees
- Courier fees
- Recording charges
Some companies may offer “bundled” services, while others itemize each cost. Either way, ensure you understand what you’re paying for and how the fees compare to those of other title companies in the area.
Pro Tip: Compare at least three estimates to ensure you’re getting a fair deal.
4. Do You Offer Both Owner’s and Lender’s Title Insurance?
There are two types of title insurance: owner’s and lender’s. While your mortgage provider usually requires lender’s insurance, owner’s title insurance is optional but highly recommended. It protects your investment from claims against your ownership, such as fraud, undisclosed heirs, or previously unpaid taxes.
Ask whether the company offers both policies and what the cost of each will be. Additionally, inquire about discounts for simultaneous issuance, which may help you save money.
5. Who Will Be Handling My Closing, and Where Will It Be Held?
Title companies employ a range of professionals, including attorneys, escrow officers, and title agents. You should know exactly who will handle your closing and whether you’ll have direct access to that person.
Also, confirm the location and flexibility of the closing process. Some companies offer remote closings, digital signatures, or mobile notary services, while others require in-office appointments.
Ask: “Is the closer available to answer last-minute questions or handle issues on closing day?”
6. How Do You Handle Title Issues or Discrepancies?
A reputable title company will conduct a thorough title search to identify any liens, easements, or other defects. But what happens if issues are found? Ask how the company handles:
- Unresolved liens
- Boundary disputes
- Missing heirs
- Fraudulent documents
They should have a process in place for resolving defects quickly and efficiently, both legally and effectively. If they can’t offer a clear explanation, that’s a red flag.
7. What Technology and Security Measures Do You Use?
In an age where wire fraud and identity theft are on the rise, a title company’s cybersecurity practices are more critical than ever. Ask about:
- Secure email communications (e.g., encryption)
- Two-factor authentication
- Fraud prevention protocols for wire transfers
- Digital closing platforms
The company should take these risks seriously and have a system to verify identities and safeguard sensitive financial data.
8. Can I Read Reviews or Speak to Past Clients?
Like any service provider, a title company’s reputation matters. Look up reviews on Google, Yelp, or real estate forums. Better yet, ask the company for references or testimonials from previous clients, especially those who had complex transactions.
Real estate agents, mortgage brokers, and attorneys are also good sources for unbiased feedback. A trustworthy title company should have nothing to hide and have a long list of satisfied customers.
9. Do You Work With Specific Real Estate Agents or Lenders?
Some title companies have existing relationships with specific brokerages or lenders, which can help the transaction go more smoothly. However, be cautious of situations where a party involved in the transaction firmly insists on using a particular title company. You have the legal right to choose your own title company in most cases, especially as the buyer.
Ask: “Do you have any affiliation or ownership ties with the real estate or mortgage company involved in my transaction?”
10. What Is Your Turnaround Time for Closings?
In real estate, time is of the essence. Delays can lead to contract violations or the loss of deals. Ask how long the title search and insurance process typically takes. Also ask:
- How soon after the clear-to-close can we schedule closing?
- What’s the average turnaround for issuing title commitments?
- What’s your policy on last-minute changes?
A reliable title company should provide clear timelines and consistently meet them.
Final Thoughts
Choosing a title company is more than just ticking a box in the home-buying process. It’s about selecting a reliable partner who can guide you through one of life’s most significant financial decisions. By asking the right questions upfront, you can ensure a smooth, secure, and successful closing.
To recap, focus on:
- Licensing and local experience
- Transparent fees
- Insurance offerings
- Communication and accessibility
- Technology and security
- Reputation and client service
Don’t hesitate to shop around and compare answers. Your peace of mind—and your property rights—are worth the extra diligence.
Learn more about our comprehensive title insurance services here.
Thank you for reading! If you enjoyed this article and want to explore more content on similar topics, check out our other blogs at Sonic Loans, Sonic Realty, and Sonic Title. We have a wealth of information designed to help you navigate the world of real estate and finance. Happy reading!
Questions to Ask Before Choosing a Title Company
Shopping for Title Insurance: A Consumer’s Guide
How Title Companies Handle Remote Closings: A Complete Guide
The Role of Abstract Officers in Title Insurance
Understanding Title Commitment Documents: A Key to Secure Real Estate Transactions
What Happens in a Title Company’s Closing Room?
The Title Search Process Explained Step by Step
Understanding Loan Policy Coverage in Refinancing
Common Title Issues That Surface During Refinancing
