For many of us, buying a home is the largest investment we will ever make during the course of our lifetime. It’s exciting! But, it’s also a high-stakes investment that can come with a lot of stressors. Homebuyers, however, can minimize much of the stress and anxiety that comes with purchasing a home by having a well-researched plan and choosing a knowledgeable, experienced team to help them along the way. Just like shopping for a realtor and a lender, did you know that you can shop around for a title company as well?

What does a title insurance company do?

The title insurance company is the neutral third party in your real estate transaction. The representative from your title and escrow company acts as a liaison between you and all of the other entities involved in your real estate transaction, including the seller, the lender and the broker/agent. A title insurance company also ensures that all titles, deeds and other important documents are filed in a timely manner and with the appropriate parties. The title company also acts as the ‘closing agent,’ which means they will collect and disburse funds that are a part of the transaction.

Do I need title insurance?

Yes. Title Insurance that covers the lender is required on all new mortgages. In other words, if you borrow money to buy a home, you must pay for title insurance. Title insurance protects both the homeowner and the lender from events that occurred before you took ownership including property loss or damage. Defects in the title could include liens that went undiscovered during the title search, mistakes on previous deeds, fraud and/or forgery.

Can I choose my own title insurance company?

Because many lenders and real estate agents have relationships with certain title companies, you may be highly encouraged to use the company they work with. While they may have good reason to recommend their title company of choice, you can — and should — do your own research before complying. As a homebuyer, you have the absolute right to advocate your own title company selection to guarantee your transaction goes smoothly and secure the adequate third party protection that you as a consumer deserve.

How do I choose a title insurance company?

The fact you are conducting due diligence in your search for a title insurance company is an important first step on the path towards a successful real estate closing. Working with a title insurance company that your lender or agent trusts may often be preferable, but you should not automatically assume that is always the best option. Local title companies may have lower fees than larger corporate title companies and often provide higher quality, personalized service. The title company will oversee the disbursement of funds at closing, so you want to select a company with a record of operating competently, honestly, and timely. Search out a title insurance company that provides a professional, timely closing experience and has a reputation of delivering an unparalleled level of service.

If you shop around for a closing agent, you can compare costs as well as determine their level of service. Talk with your lender and real estate agent about the possibility of choosing your own title insurance company if you want control over the fees you pay and the overall experience you’ll have. Work with a lender that will allow you to choose from the available title companies in the area in order to find the best option for you. They are, after all, protecting one of the largest and most important investments you’ll ever make!