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08
Dec
Questions to Ask When Searching for a Title Company
Questions to Ask When Searching for a Title Company
  • Tracy Bouchard
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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:

  • Did the title company meet your expectations?
  • Was the title company you used friendly and was it easy to communicate with them?
  • Were all payments and deadlines met in a timely manner throughout the entire process?
  • Would you recommend this title company to others, or would you suggest looking elsewhere?

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:

  • What title companies have you worked with in the past or had good relationships with?
  • Is the title company a national company, or has it been around for a long time?
  • Can you provide a reference of someone who has worked with this title company?

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:

  • How do these fees compare with fees of other title companies?
  • Will the value of this service outweigh the risk run with a smaller company with fewer reviews?
  • Does the state have fixed fees for title companies or any other legal restrictions on fees that might sway your decision?
  • Has the title company had experience handling FSBO transactions or possible problems that are run by in the title report?
  • What are the title insurance and escrow fees? (These fees, unlike recording fees and transfer tax fees, can be different from different companies.)
  • What are the company’s online ratings and reviews like?