Title Company

A title company performs three core functions: (1) Title search: researches public records to confirm the seller has clear ownership and identify any liens, judgments, easements, encumbrances, or claims against the property; (2) Title insurance: issues an owner's policy (for the buyer) and a lender's policy (required by the mortgage lender) protecting against title defects not found in the search; (3) Closing/escrow services: acts as neutral third party to collect funds, disburse payments to the seller, pay off existing liens and liens, record the deed, and manage the closing process. In most US states, title companies handle closings. In some states (New York, South Carolina), attorneys conduct closings instead of or alongside title companies. See ALTA — American Land Title Association.

There are two types of title insurance policies: (1) Lender's policy: required by your mortgage lender — protects the lender's interest in the property up to the loan amount. It does not protect you as the buyer; (2) Owner's policy: optional but highly recommended — protects your equity and ownership interest. Covers losses from: forged deeds, undisclosed heirs, clerical errors, fraud, and other title defects that appear after closing. Owner's policy is typically a one-time premium paid at closing: 0.5%–1.0% of the purchase price. The lender's policy is included in your closing costs and is mandatory. In Canada, title insurance is similar — major providers include FCT, Stewart Title, and First Canadian Title. See title insurance glossary and ALTA.org.

Title company fees typically include: (1) Title search fee: $150–$400 to research public records; (2) Title insurance (lender's): varies by loan amount, typically $500–$1,500; (3) Owner's title insurance: optional, 0.5%–1.0% of purchase price; (4) Settlement/closing fee: $300–$700 for managing the closing; (5) Recording fees: $50–$250 to record the deed and mortgage with the county; (6) Courier/wire fees: $25–$50. Total title company costs: approximately $1,500–$3,500 on a typical $400,000 purchase. In refinances, title fees are lower (no deed transfer) — typically $500–$1,500. Title fees are listed on your Loan Estimate and Closing Disclosure. See closing costs glossary.

Yes — under RESPA (Real Estate Settlement Procedures Act), you have the right to choose your own title company. Your real estate agent or lender may recommend one, but you are not required to use their preferred provider. Shopping for title can save $200–$800. However, if your agent or lender has a controlled business arrangement (CBA) with a title company, they must disclose it and cannot require you to use it. To compare title companies: request itemized fee quotes and verify their state license. Note: title company rates for title insurance premiums are regulated in many states — the policy premium may be the same across companies, but settlement fees vary. See CFPB — Can I choose my own title company?

In Canada, the title company role is performed primarily by real estate lawyers (solicitors). Every Canadian real estate transaction requires a lawyer (or in Quebec, a notary) to: (1) search title and review the chain of ownership; (2) prepare and register the mortgage and transfer documents with the provincial land registry; (3) manage the flow of funds at closing (receive mortgage proceeds, disburse to seller, pay land transfer taxes and outstanding liens); (4) issue title insurance (optional but common through FCT, Stewart, or First Canadian Title). Canadian lawyer fees for a purchase transaction: typically $1,000–$2,500. Canadian title insurance is a one-time premium similar to the US — approximately $200–$500 for most transactions. See FCAC — Mortgage closing costs in Canada.