How to Choose a Title Company When Buying a Home

A title company can play a major role in getting a home purchase from accepted offer to completed closing.

Depending on the state and transaction, a title company may research the property’s ownership records, help resolve title problems, issue title insurance, coordinate settlement and handle the money moving between the buyer, lender and seller.

You may receive a recommendation from your real estate agent, lender or attorney, but that doesn’t necessarily mean you have to use the first company suggested.

When you’re allowed to shop for title and settlement services, compare more than the advertised fee.

Key Takeaways

1. You can often shop for title and settlement services, although the process varies by state and transaction.
2. Compare total costs, communication, experience and security practices rather than relying on one referral.
3. Verify wiring instructions independently before sending money for closing.

What Does a Title Company Do?

A title company can perform several services connected with the transfer and financing of real estate.

Depending on the transaction, those services can include:

• Searching public property records
• Examining the chain of title
• Identifying recorded liens and other title issues
• Preparing a title commitment
• Coordinating resolution of title requirements
• Issuing lender’s and owner’s title insurance
• Acting as the settlement or closing agent
• Receiving and distributing closing funds
• Coordinating signatures
• Recording the deed and mortgage documents

The exact role varies by state.

In some areas, a title company commonly conducts the closing. Elsewhere, an escrow company or attorney may handle settlement instead.

Can You Choose Your Own Title Company?

Often, yes, but not in every situation.

If you’re getting a mortgage, check page 2 of your Loan Estimate.

Section C lists required services for which the lender allows you to shop for a provider. Title-related services are commonly included there.

Your lender must also provide a written list of providers for the applicable shoppable services.

You may be able to choose another qualified provider that isn’t on the list as long as your lender will work with that provider.

State law, local practice and your purchase contract can also affect which party selects a title or settlement provider.

Should You Use the Title Company Your Real Estate Agent Recommends?

You can consider the recommendation without treating it as your only option.

An experienced agent may have worked through many transactions with local title companies and can tell you which providers communicate well and handle problems efficiently.

Ask why the company is being recommended.

Useful questions include:

• How often have you worked with this company?
• What do they do particularly well?
• How quickly do they communicate?
• How do they handle title problems?
• Is your brokerage or any related party affiliated with the company?

Then compare that recommendation with at least one other provider if you’re permitted to shop.

Can an Agent or Lender Be Paid for Referring You to a Title Company?

Federal law restricts referral arrangements involving many residential mortgage settlement services.

Section 8 of the Real Estate Settlement Procedures Act, or RESPA, generally prohibits giving or accepting a fee, kickback or other thing of value in exchange for referring settlement-service business involving a federally related mortgage loan.

There are permitted arrangements for actual services and properly structured affiliated businesses, among other exceptions.

If a real estate brokerage, lender or another settlement provider has an ownership interest or other covered affiliation with the title company being recommended, federal rules can require an affiliated-business disclosure.

An affiliation doesn’t automatically mean the company is a poor choice.

It does mean you should understand the relationship and compare the provider on the same factors you would any other company.

1. Compare the Total Title and Settlement Costs

Don’t choose based on one fee.

Ask for an itemized estimate showing charges such as:

• Title search or examination
• Settlement or closing fee
• Lender’s title insurance
• Owner’s title insurance
• Title endorsements
• Document preparation
• Wire or courier charges when applicable
• Recording-related services

Some title insurance premiums are regulated or filed with state insurance regulators, which can reduce how much the insurance portion varies among companies.

Settlement and other service charges may still differ.

If you’re financing the purchase, look at how title charges appear in Section C of your Loan Estimate.

When you compare Loan Estimates, remember that a difference in shoppable title costs doesn’t necessarily mean one lender’s underlying mortgage pricing is better. You may be able to choose a different title provider.

2. Understand Which Title Insurance Policies You’re Buying

There are two primary title insurance policies in a financed home purchase.

Lender’s Title Insurance

The lender’s policy protects the mortgage lender’s insured interest in the property.

Mortgage lenders usually require this coverage.

Owner’s Title Insurance

The owner’s policy protects the homebuyer’s insured ownership interest against covered title risks.

It is generally optional from the lender’s perspective.

Ask the title company:

• What does each policy cost?
• What coverage is included?
• Are there enhanced policy options?
• Are any endorsements recommended or required?
• Is there a simultaneous-issue discount when both policies are purchased together?

Our guide to title insurance explains the difference between lender’s and owner’s coverage in more detail.

3. Ask Which Title Insurer Underwrites the Policy

The company coordinating your transaction may be a title agency rather than the insurance company ultimately underwriting the policy.

Ask which insurer will actually issue or underwrite the title insurance.

You can then research the insurer through the appropriate state insurance department or other regulator.

Depending on your state, you may also be able to verify the title agency’s or title agent’s license.

4. Check Licensing and Regulatory Information

Title insurance regulation is primarily handled at the state level.

Licensing requirements vary, but your state insurance department is a useful starting point for checking:

• License status
• Company information
• Consumer complaint resources
• Enforcement information when publicly available

If an attorney will conduct the closing, you can also confirm their license through the applicable state bar.

Don’t rely on a Better Business Bureau page as a substitute for checking the actual government regulator.

5. Research the Company’s Reputation

Customer reviews can still provide useful information, especially when you’re looking for patterns.

Pay attention to repeated comments involving:

• Communication
• Unexpected fees
• Closing delays
• Document errors
• Responsiveness
• Problem resolution
• Wire-transfer procedures

One negative review doesn’t tell you much by itself.

Repeated complaints about the same issue deserve closer scrutiny.

6. Ask Who Will Handle Your File

You don’t necessarily need a large company.

You need a company that can manage your transaction efficiently.

Ask:

• Who will be my primary contact?
• Will I have a dedicated escrow or settlement officer?
• How quickly do you normally respond?
• What is the best way to contact you?
• Who handles questions if my primary contact is unavailable?

Closing involves coordination among the buyer, seller, lender, agents, insurance company and sometimes attorneys.

Reliable communication can matter as much as a modest difference in fees.

7. Ask How the Company Handles Title Problems

A straightforward title search may find nothing more complicated than the seller’s existing mortgage.

Other transactions can uncover:

• Old mortgages that were never released
• Judgment liens
• Tax liens
• Mechanic’s liens
• Probate issues
• Incorrect legal descriptions
• Missing signatures
• Ownership disputes

Ask the provider how experienced it is with resolving title defects.

If the title search finds a lien, our guide to how liens affect a home sale explains why some claims can be resolved routinely while others can delay closing.

8. Ask About Closing Logistics

Closing doesn’t look exactly the same everywhere.

Depending on the jurisdiction and transaction, you might:

• Sign at the title company’s office
• Sign at an attorney’s office
• Use an escrow company
• Sign remotely where permitted
• Use a mobile notary
• Sign buyer and seller documents separately

If you’re purchasing a property in another state or can’t easily attend in person, ask about the process early.

Questions can include:

• Where will closing take place?
• Can documents be signed remotely?
• Will notarization be required?
• When will I receive documents to review?
• How will I provide my cash to close?
• When will the deed be recorded?

9. Ask How the Company Protects Closing Funds

This should be one of your most important questions.

Real estate transactions are frequent targets for wire fraud.

Scammers can compromise email accounts or impersonate a title company, agent or attorney and send a buyer fake wiring instructions.

Ask the title company about its security procedures before you’re ready to transfer money.

Good questions include:

• How will you provide wiring instructions?
• How should I independently verify them?
• What phone number should I use to confirm the account information?
• Do you ever change wiring instructions by email?
• Who should I call if I receive a suspicious message?

Never send closing funds solely because an email tells you where to wire the money.

Independently verify the account name and number with a trusted title or settlement representative using a phone number you already know is legitimate.

10. Find Out When You’ll Receive Your Closing Documents

For most mortgages subject to the federal Closing Disclosure rules, the lender must make sure you receive the Closing Disclosure at least three business days before closing.

Use that time to compare the final figures with your Loan Estimate.

You can also ask the title or settlement company to provide other closing documents in advance when possible.

Documents can include:

• Promissory note
• Mortgage or deed of trust
• Deed
• Title documents
• Settlement documentation

If you find an error, raise it before the scheduled signing rather than hoping it can be fixed at the closing table.

11. Review the Title Commitment

A title commitment is generally issued before the final title insurance policy.

It can identify:

• The proposed insured parties
• The property being insured
• Requirements that must be completed before coverage is issued
• Exceptions that will not be insured

Ask questions if you don’t understand an easement, restriction, lien or other exception.

The point of receiving the title information is not simply to collect another closing document. It is to understand what rights and claims affect the property you’re about to own.

12. Make Sure the Company Can Work With Your Lender

If you’re using a mortgage, your lender has title and closing requirements that must be satisfied before funding.

Before switching to a different title provider, confirm that:

• The lender will accept the company
• The company can meet the lender’s title requirements
• The title insurer is acceptable to the lender
• The company can meet your closing deadline

This is particularly important if you select a provider outside the lender’s written list of settlement-service providers.

Does the Cheapest Title Company Make the Most Sense?

Not necessarily.

Title insurance premiums may not vary much in some states because of rate regulation.

A title company’s service fees, responsiveness and settlement practices can still differ.

A slightly higher fee may be reasonable if the provider offers stronger communication or has significant experience with a complicated title issue.

At the same time, a referral or well-known name isn’t a reason to accept unnecessarily high fees without comparison.

Look at the full package.

Do You Need a Local Title Company?

Not necessarily, but local experience can be useful.

A provider familiar with the area may have experience with:

• Local recording offices
• Transfer taxes
• Common title issues
• Municipal requirements
• Local closing customs

What matters most is that the provider can legally and effectively handle the transaction where the property is located.

A buyer purchasing from another state can often work with the company by phone, secure portal and electronic communications without needing to visit the office repeatedly.

Do You Have to Use the Seller’s Title Company?

Not necessarily.

Who selects the provider can depend on the contract, state law, local custom and which party is paying for particular title services.

If the seller proposes a particular provider, ask whether you have the right to select another company and what changing companies would mean for cost and timing.

If you’re financing the purchase, also check with your lender before changing providers.

What Questions Should You Ask a Title Company?

Before choosing a provider, ask:

1. What services will you provide?
2. What are your total title and settlement fees?
3. Who underwrites your title insurance?
4. What will lender’s and owner’s title insurance cost?
5. Is simultaneous-issue pricing available?
6. Are there optional or required endorsements?
7. Who will be my primary contact?
8. How do you handle title defects?
9. How will you send and verify wiring instructions?
10. Can you meet my contract’s closing deadline?
11. Where and how will the closing occur?
12. When will I receive documents for review?

Title Company Comparison Checklist

Bottom Line

You don’t have to choose a title company solely because your agent, lender or another professional recommends it.

When you’re allowed to shop, compare total costs, title insurance coverage, regulatory information, communication, experience and closing procedures.

Most importantly, make sure you’re comfortable with how the company handles your money. Confirm wiring instructions independently before sending closing funds and question any last-minute change.

A good title company isn’t simply the one that gets documents signed. It should help make sure the ownership transfer, title requirements, closing funds and recording process are handled correctly and clearly.

FAQ

What does a title company do?

A title company can research property records, identify title problems, issue title insurance, coordinate settlement, handle closing funds and record documents depending on the state and transaction.

Can I choose my own title company?

Often, yes. Your Loan Estimate identifies required services you are permitted to shop for. State law, the purchase contract and lender requirements can also affect provider selection.

Do I have to use the title company my real estate agent recommends?

Not necessarily. An agent’s recommendation can be useful, but you can often compare other eligible providers when the service is shoppable.

Can a real estate agent receive a referral fee from a title company?

RESPA generally prohibits paying or receiving a fee, kickback or other thing of value in exchange for referring covered settlement-service business. Certain payments for actual services and properly structured affiliated-business arrangements can be permitted.

How do I know whether a title company is legitimate?

Check applicable licenses through the state insurance regulator or other appropriate agency, identify the title insurer backing the policy and research complaint and review history.

Should I use the cheapest title company?

Not automatically. Compare the total cost alongside communication, experience, title coverage, security procedures and ability to meet your closing deadline.

Who pays the title company?

Responsibility for title and settlement charges varies by state, local custom, purchase agreement and service. Review your contract and Loan Estimate to see how the expected costs are allocated.

Can a title company conduct the closing?

Yes, in many states. In other areas an escrow company or attorney may conduct the closing instead.

What is the most important security step when working with a title company?

Verify wiring instructions independently before sending money. Use a trusted phone number rather than relying on contact information contained in an unexpected email.

When should I choose a title company?

Choose the applicable title or settlement provider early enough to complete the title search, resolve any problems and meet the closing deadline in your purchase contract.