Ask Val: Choosing The Right Title Company

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: How do you choose a title company to work with when buying or selling real estate? What should I look for in a title company?

Answer: Title companies handle the legal side of the transaction such as ensuring the buyer has clear ownership, reviewing and recording the deed, issuing title insurance, and preparing paperwork for the buyer and seller to sign at closing. They operate in the background of transactions and usually the less you hear from them, the better. They are not legal representatives of either party and objectively support the buyer and seller.

In Virginia (and D.C./MD), buyers select the title company. In some cases, a seller may want to use their own firm/attorney and will request a “split settlement” but that is less common and should be done for a good reason.

Most people don’t know a title attorney or get a referral from a friend, so how do you go about choosing your title company?

Your Real Estate Agent

You shouldn’t be hiring a real estate agent just because they’re the first person to meet you at a property you found online. Among the reasons you hire an agent should be because you trust their advice and want access to their network of professionals who are relevant to a real estate transaction.

Your agent should be the first person you turn to for a recommendation on the title company because he/she has likely worked with dozens of title companies before and hopefully has one or two to recommend.

It’s perfectly fair to ask your agent why they’re recommending a specific title company.

Fees

The highest fee associated with a title company is title insurance and those prices are set by the insurance company, not the title company. Different title companies work with different title insurance companies, but rates are very similar amongst them. If you see big differences in title insurance between two title companies, one may be quoting a basic vs enhanced coverage (buyer’s choice).

I rarely see discretionary fees charged by the title company vary by more than a few hundred dollars. You can always find a cheaper option for title services, but the legal support on a real estate transaction worth hundreds of thousands or millions may not be a smart place to save a few hundred dollars and risk quality of service.

Location

It’s important to use a local title company who is familiar with local real estate and tax practices, not just licensed to practice here. I use one title company (Universal Title) for most of my Northern Virginia transactions.

Attorney Experience

Most sales follow a pretty standard, predictable process that inexperienced title companies/attorneys can handle but occasionally something unexpected comes up that requires experience and expertise to identify and resolve an issue. If problems do surface, having access to an experienced local title attorney can be the difference in whether or not the problem is even identified, whether a sale closes, and/or how much time and stress it takes to resolve the issue.

Back-Office Support

The quality and experience of the support staff is equally as important as the attorney. Look for a title company who has experienced processors who have been with the company for a while. Title companies who can afford to cut fees below their competition likely do so by not having a full supporting cast or not paying to hold onto experienced processors.

Insurance Provider

One of the key roles of a title company is that they issue title insurance, which protects your ownership interests in the property from any future claims. Most title companies have one insurance company they issue policies for such as First American, Old Republic and Chicago Title.

Most buyers are indifferent about their title insurance provider, but you may want to confirm who the title company uses to do some background on them such as size (market share) and how long they’ve been in business. I generally prefer larger insurers who have been in business for a long time.

If you’d like more information, or would like a question answered in my column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.