In most states, consumers are free to shop for title insurance and to select a title company, settlement company, or attorney to conduct their closing. (Ask a local title company if consumers are able to shop for title insurance in your state.) Many consumers rely on their real estate agent or lender for a recommendation for a title company since they are in a position to know which companies provide good service. However, you are not required to use the title company they recommend. If you decide to choose your own title company, we encourage you to shop for title insurance. There are some things to keep in mind, however, which vary from state to state. And there are some terms you will want to know when speaking with title companies asking for a rate quote.

Knowing what you are asking for is your first step in shopping for title insurance rates. There are two kinds of title insurance: the Loan Policy, which protects the lender's investment, and the Owner's Policy of Title Insurance, which protects the buyer's interests. If you are obtaining a loan to purchase your house, the lender will usually require that you purchase a Loan Policy to protect their investment. We strongly encourage consumers to obtain an Owner's Policy for a one-time fee paid at closing to protect their interests. Who pays for the Owner's Policy varies from state to state and sometimes even within a state. For instance, on much of the West Coast, the seller would purchase the Owner's Policy for the buyer. On the East Coast, however, the buyer usually pays for the Owner's Policy. An Owner's Policy is not automatically issued in every state. Be sure to ask your local title company or real estate agent how it's handled in your area and whether the Loan and Owner's policies come together or are sold separately.

How title insurance rates are set varies from state to state. Some rates are set by the companies themselves and some are set by the State Department of Insurance. Texas sets the rates and each title company is required to charge the same for title insurance for each different type of policy and for each different type of rate. As mentioned above, some rates may or may not include other services provided by the title company such as conducting the closing, preparing and notarizing documents, adding endorsements to the policy which may be required (usually by the lender or buyer), and other services. When comparing one rate to another, be sure to get detailed information on what is included in that rate, so you are comparing equally.

A settlement agent glues together the process of the sale, working with both the buyer and the seller in the transaction. They research the title, making sure there aren't any liens on the property, pay the seller and the old lender, obtain recording fees and taxes for the government, and file the paperwork at the local courthouse. In effect they orchestrate the settlement from the start to finish.
 
Closing the sale of your house or business is easy, if you chose the right title company.  Title companies, or any settlement agent who performs a closing - attorneys, escrow agents or title insurance companies - are involved in a multitude of activities involved in a closing.  In the state of Texas, the settlement agent glues together the process of the sale, working with both the buyer and the seller in the transaction. They research the title, making sure there aren't any liens on the property, pay the seller and the old lender, obtain money from the buyer and new lender, obtain recording fees and taxes for the government and file the paperwork at the local courthouse.  In effect, they orchestrate the settlement from start to finish.

So how do you find a competent title professional? ALTA recommends going through someone you are already working with - your real estate agent or lender. If you are obtaining a loan, chances are the lender will recommend you use a title company (or attorney if they are required in your state) they are familiar with. If you are not obtaining a loan, ask your real estate agent for a recommendation.  Agents and lenders usually have relationships with several title professionals they know are reputable and provide good customer service.  You can always ask friends and neighbors if they were happy with their settlement agent and get a referral or you can simply select your own title professional.  If you do, there are some things you should look for.  How many transactions does the company do?  Is the company sufficiently staffed for the amount of work they do?  Find out if the company is part of the state title association or the American Land Title Association.  If they are members, they are keeping abreast of state and federal level current trends and requirements.  You can also contact your state insurance department or the Better Business Bureau to see if they have any information on the company.

For more information or if you have questions, please contact us today!