How to Choose a Title Company
Choose And Do not Lose
As a Real Estate Broker I have helped literally hundreds of families choose title companies over the years. I'm always surprised to learn that a lot of Sellers do not realize they can choose the title company that plays an integral role in managing the closing process and even performing the actual closing. Granted, most listing brokers have established relationships with title companies built after years of (hopefully) positive experiences and most listing brokers will rigidly urge their clients to use whichever title company they are used to. However, in today's crazy real estate market where every dollar of closing costs, every simple delay and every hiccup in the closing process can be the difference between closing the deal or losing the Buyer-it is more important than ever to choose a great title company .
Behind the scenes of a real estate transaction a title company performs a wide variety of functions and is relied upon by both real estate agents (those representing Buyer and Seller or transaction agents) as well as Buyer and Seller to aggregate all of the responsibilities outlined in the Contract To Buy And Sell (Purchase Contract) including researching the various fees associated with transferring the property, various loan details, taxes, obligations, prepaid expenses-to establish tax and insurance escrow accounts and much more.
Early in my career I recognized the importance of a title company which could add value to the transaction with proactive troubleshooting, consistent attention to detail and a high level of service
Now running a team of brokers in I have the luxury of hand picking a title company from the myriad of options available. Since every one of my transactions is managed as it's the most important transaction in the world – since it is unduly absent for the people involved in it, I align myself with the best of the best professionals to be sure every aspect of the transaction is handled at the highest level possible. So let me share with you the four key points to consider when choosing a title company:
Reputation and history- there's no doubt that in this industry history repeats itself. Lazy brokers continue to make mistakes based on procrastination while top performing brokers continue to provide excellent service through established efficient systems and processes. In the same light title companies who drop the ball unduly have a pattern of having dropped the ball in the past. Ask your friends and family, other real estate agents in your office and mortgage brokers for their good and bad testimonials. Since Title companies are similar to insurance agents in the sense that you are not actually buying the insurance from the title company the largest consideration in reputation is their ability to consistently take your calls, return your calls and provide intelligent, accurate answers promptly. When a title rep. (sales rep.) takes you to lunch, ask what the bulk of their experience is; is it from new construction purchases, commercial transactions, land sales, refinances, for sale by owner or broken resale.
In today's fragile state of affairs in both the national economy and the local housing market it becomes more and more clear that the financial stability of the title company is very important. There are significant risks to you as a home Seller if your title company fails.
1. If a title company goes out-of-business the day before closing, the closing will certainly be postpone causing both financial and moving problems for both the buyer and the seller.
2. If the going-out-of business title company holds earnest money and / or mortgage costs, those moneys may be tied up while a bankruptcy court sorts out the accounts.
3. If the title company makes an escrow mistake at closing and goes out of business, the seller may be forced to fix the problem instead of a title company.
4. If the title company's list of title exceptions on the Schedule B-2 do not match the seller's title exceptions on the warranty deed, the seller could be liable for claims by the buyer later.
Secondly you want to be confident that the title company is well aware of the common pitfalls and solutions to issues that arise in your specific niche. Do they have working relationships with lenders, do they have contacts in loss mitigation departments of banks (if you may be working with short sales) Will you be working with the same person through the lifecycle of the transaction?
The location of the title office may be a valuable consideration as well. Earlier in my career I chose a different title office for each listing based on a relationship with a regional rep. and the availability of a satellite office near where the specific listing was located. Now I work almost exclusively with a title company based on their customer relationship management skills, their knowledge of the processes and their track record of successfully closing even the most challenging deals combined with their willingness to perform the actual closing at a location convenient to my clients .
Lastly, the fees that the title company charges need to be evaluated. Fees charged for both title insurance and closing services do vary by company and can be significant. The individual title fees and additional service fees (such as for closing a second mortgage) can add up. Be sure to have an open discussion about each of the fees. Of course, many fees are non-negotiable and / or determined by the individual county, State or lender such as the transfer fee, recording fees, doc prep fees, state stamps etc …
When a real estate transaction is easy and has no catastrophes the title company is almost invisible and silently working in the background. However, the more a transaction unravels, the more the escrow officer rise to the top and becomes increasingly important. It is certainly not unusual for a good title company to save a transaction from dissolving when various parties have failed in maintaining communication or lost their goodwill. Choosing the best title company for your transactions is an important decision that, as a real estate agent can impact your career and as a home seller is integral in assuring the smoothest transaction possible. Evergreen Real Estate
