Tips on Selecting / Recommending a Title Company

Selecting or recommending a Title Insurance Company, Title Agent or an Attorney Title Agent (referred collectively as a "Title Company ") that provide title insurance and closing settlement services is one of several key elements to a successful real estate transaction. The largest single financial transaction that a person makes is often the purchase, sale or the refinance of their home. The importance of any settlement service to a real estate transaction cannot be overlooked. The use of a qualified Title Company will go a long way in making sure that your real estate transaction and closing will be a smooth and enjoyable experience. Deciding how to proceed when choosing a Title Company should be a result of careful consideration and not just based on the mere referral or recommendation of another.

The costs of title insurance and related closing services, unless promulgated by a particular state, can vary dramatically, even though the industry is generally regulated in some manner and degree. This is why real estate professionals (i.e. real estate agent/broker, mortgage originator, banker and attorney) and consumers need the most comprehensive information to be able to make an informed decision when selecting or recommending a Title Company for their real estate transaction.

Understand that a title insurance policy is designed to protect a person's interest in real property from financial loss due to omissions or errors of some one else's claimed interests to the insured real property. In layman's terms, a title insurance policy can protect a seller or buyer from a dispute that may arise regarding their interest and rights to own the property in question. If a future problem does occur, the title insurance company must pay the insured for damages under the terms of the title insurance policy.

In addition, the closing/escrow services that a Title Company performs to consummate the real estate transaction (as permitted by local laws and practices) is as important as the issued title commitment and subsequent title insurance policy. As a consumer or real estate professional, you will need to do some homework and comparison shopping before selecting or recommending a Title Company. Understanding the following items will definitely assist in learning what to know and look for when selecting or recommending a Title Company.

Product

Title insurance policies forms and standard base coverages, terms & conditions and exclusions are developed by the American Land Title Association (ALTA) and issued by all title insurance companies and their agents. Always request a policy with extended coverages (i.e. deletion of pre-printed title exceptions). Also visit www.Demotech.com or www.lace.krollbondratings.com to check out the financial ratings and performance of a particular title insurance underwriter.

Very important aspects to the coverage of your title insurance policy are the title exceptions that are initially listed on the title commitment or preliminary title report. A reasonable search and examination of the public records will typically reflect all applicable title exceptions (except for company pre-printed or standard title exceptions) by specific identifiable reference, such as a book and page, reception number or a dated but unrecorded document. One should always question those title exceptions that are general in content and don't reference a specific book and page or reception number, as it may negate coverage due to an insufficient search and examination of the public records by the Title Company.

Service

Professionalism, knowledge, communications, accuracy, and timeliness in the preparation of title and closing documents are key factors to be considered in the overall process. Quality service also includes making sure the title company or attorney agent provides you with signed copies of all your closing documents for future reference or tax purposes.

Convenience

Multiple office locations and use of advanced technology in providing services benefit consumers and real estate professionals. However, this convenience may also result in higher title rates and closing fees charged by a Title Company.

Company Experience & Reliability

How long has the Title Company been in business, or if a new company, what is the experience of its management and employees? Learn more about the Title Company by visiting their website, contacting the Better Business Bureau and applicable State Regulatory Agencies and by obtaining a reference or two from someone that will share comments of their recent experiences.

Consumer Protection

Protecting your privacy, personal interests, health, monies, are important key elements that should be considered in order to safeguard your real estate closing. In order to minimize or eliminate any potential liability or risk, it's important to make sure the Title Company you will be selecting or recommending has the following business insurance /coverages that can assist in protecting you and your transaction.

Professional Liability ⁄ Errors & Omissions Insurance

Provides assurances to you that the Title Company is reputable in protecting itself from claims if you hold the Title Company responsible for errors or the failure of their work in services performed. This form of insurance should provide coverage for both "title and closing/escrow services".

General Business Liability Insurance

Provides assurance to you that the Title Company is reputable in its business practices to protect itself and you from medical injury, property damage, theft claims, and other actions.

Fidelity Insurance

Provides coverage that protects the Title Company and you from loss of monies or other properties as a result of employee dishonesty related to embezzlement, forgery, robbery, safe burglary, computer fraud, wire transfer fraud, counterfeiting, and other criminal acts.

Crime Insurance

Provides coverage that protects the Title Company and you from loss of monies or other properties as a result of being victimized by an outside person perpetrating forgery, robbery, safe burglary, computer fraud, wire transfer fraud, counterfeiting, securities theft and other criminal acts.

Closing Protection Letter or Insured Closing Letter

Commonly referred to by the industry as a CPL, this letter (as permitted or restricted by individual state laws) is almost always requested by lenders and issued by a title insurance underwriter, which provides the lender with additional protection and assurances. This protection provides coverage against loss from the failure of the underwriter's designated title agent to comply with written closing instructions and the fraud, dishonesty and negligence of the title agent in the handling of monies and documents in connection with the closing. A seller's, buyer's or borrower's CPL may at the discretion of the individual title insurance underwriter be obtained upon request unless restricted by state laws. Click here to view samples of Closing Protection Letters.

It is important to note, that a Title Company may utilize the contract services of an outsourced notary/settlement signing service to assist in facilitating your real estate transaction. If this is the case, then you need to make sure the outsourced notary/settlement signing service is insured / bonded or they are covered under the insurance /coverages of the Title Company.

In summary, is essential that you or your real estate professional request that your selected title company's underwriter issues a "Closing Protection Letter" (unless prohibited by state law) and that your Title Company provide you with a "Certificate of Liability Insurance" evidencing the Title Company's coverage of General Business Liability Insurance, Professional Liability Insurance (E&O), Fidelity Insurance and Crime Insurance in protecting you and your real estate transaction.

Costs

Keep in mind that costs may vary substantially and costs does not necessarily equate to a better product or higher level of service. Remember to shop and compare prices for each transaction as qualifying discount programs can vary from company to company.

myTitleIns.com has now provided you with some valuable tips a in determining how to make an informed decision in selecting or recommending a Title Company for your real estate transaction. Remember, whether you're a seller, buyer, borrower, lender, real estate agent or attorney to the real estate transaction, utilizing a Title Company with the proper insurance coverages can protect everyone.