Selecting A Title Company
As with anything, great ways to identify quality or problem companies is to simply ask friends and family for referrals. There is no better way than talking with someone who has experienced the services offered by a specific title company.
What is a title company? In reality, a title company is nothing more than an independent impartial entity that manages a closing process. However, they also do much more. Though a bit more complicated in process, a title company will typically issue or obtain insurance for your transaction with what is called a title policy. This insurance policy protects you the buyer, the seller and the mortgagor (the lender) against any defects in the lien from future or unknown present 3rd party claims which may arise resulting from prior ownership. Where an attorney is involved, they will order your title policy from a title company and manage the closing from their office.
When shopping title companies, these are the three most important things to consider:
- How much will ALL the associated Title Fees cost you
- What is the closing flexibility. In other words, if my Lender decides to close tomorrow, can you fit me in?
- Do you offer courtesy closings? A courtesy closing is typically completed by a 3rd party in locations outside of the title companies office. These closings can occur in the home to be purchased, at your place of employment, where ever. They can also be done at 9 pm in the evening or 3 am in the morning.
There is a specific way to shopping a title company and the fees. What you will ask for is a “Sample HUD” outlining the associated fees for the buyer as they relate to the purchase of a property for “X” dollars. “X” will equal the amount you plan to spend for your home purchase. That could be $100,000.00 or $250,000.00, whatever you have determined your budget allows in terms of total purchase price.
Be sure to refer to the Title Company Fee worksheet to make the proper notes when quoting third party title companies. In all cases, compare quotes and ask questions about discrepancies between fees when items show up on one quote but not another. Title companies charge “Junk Fees” to and this is a good way to catch them.
Once you have identified a property to purchase, be sure you insist on using your title company. The only exception is if the seller is paying your closing costs, or if the seller agrees to pay the difference between what your title company quoted and what the sellers title company charges you.