When buying a home, picking the right title company will determine whether your house-hunting process rolls over smoothly or not – especially in its final stages. Your title company of choice will likely give you the most accurate information on estimated closing cost and final closing cost statements.
While many decide to choose their title company by word of mouth, there are several questions you should ask when choosing one that will boast a good insurance policy and easily handled escrow work.
Word of Mouth
A good starting point in your search could be asking friends and family members in your area for title companies they may have previously used. Usually, this tactic can work in your favor if the title company is well known by your community. Chances are that if your neighbors have been on good terms with this company, you might be as well! Knowledge of local laws and a proven track record are great determinant factors of whether a title company can be trusted.
You might want to ask your friends and family these questions before moving forward with your decision:
Check in with Your Real Estate Agent
Take the references of real estate agents into account. They not only are already familiar with the landscape of title companies in the area, but can also tell you which companies execute their plans in a timely manner to make sure the escrow pushes through quickly. It is often recommended to ask multiple agents which companies they recommend. Cross-referencing can never be a bad thing when it comes to making an important decision.
A few good questions to ask your real estate agent could be:
Be Wary of Fees!
Some who are eager to jump the gun and quickly select a title company may immediately jump to conclusions, thinking that the title company with the lowest fees is the best way to budget this expense. However, this proactive approach comes with a risk.
Title companies with lower fees are typically “mom and pop” companies, whose businesses are (more often than not) less stable than those of bigger companies. Because these smaller companies can sometimes underperform and go out of business with little notice, it is difficult for them to pay off the mortgage on time.
Some title firms, on the other hand, have skyrocketing fees that are overpriced due to hidden relations between title companies and other firms. By comparing fee structures of title companies you are evaluating, it is easy to see which are outliers in monetary value.
Some states like California have fixed fees for title companies, which might be another factor to consider if you haven’t fallen in love with a property you want to purchase already.
Here are some questions you can ask yourself to get a better idea of the enclosed costs with your title of choice: