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Six questions and answers to ask re: Title Company
Is my money safe?
The way a title or closing company handles its escrow funds is of utmost importance. The news stories you read are true: People do lose money as a result of incompetent, insolvent, or dishonest title and escrow companies. Reputable companies are trying to educate consumers about how important it is to carefully select their own title and escrow company.

Is my investment protected?
It is important not only to protect the clients’ funds, but also to protect their investment into the future. It is absolutely appropriate for Realtors and homebuyers to inquire about an underwriter’s financial rating — and a reputable title company will be glad you asked.

Is my title company a neutral third party?
Some title companies are now owned by lenders, real estate firms, and builders. These arrangements are legal if properly structured and disclosed. The consumer, however, is often best protected when there is no conflict of interest or financial incentive for the referral of title business.

Are your rates filed with the Division of Insurance? In addition to your premiums, what are your other fees and charges?
Title insurance companies by law are required to file rates with the Division of Insurance and cannot discount or deviate from those rates. Buyers may be inclined to find and follow the lowest rate, but if a title insurance premium is notably lower than the market rate, this should be a red flag to look more closely at whether the company is providing core title and closing services in compliance with RESPA. Additionally, cut-rate premiums may indicate a lack of experience, a lack of financial and accounting controls, inferior title searches and examinations, or a substandard source for property data.

Do you conduct thorough title searches and report all exceptions? As a Realtor looking out for your buyers’ best interests, would you advise them to accept a title commitment that lists “any and all documents of record” and “any and all easements of record” on the exceptions page, instead of informing your clients what those documents are? That is like asking clients to do their own search to find out what encumbrances affect the property! If you were about to purchase a property with a 30-foot public service easement along one side of your property, would you expect to know about it prior to closing? Some title companies are in fact providing commitments that do not specifically disclose encumbrances like these.

Are you locally owned and operated? There are several reputable national title insurance companies that offer adequate products and services. However, many title companies outsource the production of the title commitment overseas. A product prepared locally, by local employees, offers advantages that a product prepared abroad cannot. A local title insurance company knows the local real estate market, plus you’ll be supporting local employees who live and work in your communities. Local independent businesses return more money to the local economy, are more invested in its future, and give an average of two to three times greater support to local non-profit organizations compared to national firms.