The $638 Million Reason to Choose Your Title Company Wisely
What Savvy Real Estate Investors Should Look for in a Title Company
By Radian Title Services
As real estate investors, you are always on the lookout for the next great opportunity. But in building your asset portfolio, are you giving enough thought to the foundation of every transaction — the title company? This often-overlooked aspect of real estate investing may help make or break your success in the long run.
The title landscape has seen a surge of innovation in recent years. While innovation is welcome, it is crucial to look beyond headlines that seem too good to be true. The real value of a title company lies in its ability to protect your investments when things go sideways — and in real estate, they often do.
Consider this: According to the American Land Title Association (ALTA), title insurance companies paid out over $638 million in claims in 2023 alone. This staggering amount highlights the importance of choosing a financially stable title company.
New title technologies often lack the financial backbone to weather significant claims. In the worst-case scenario, an underfunded title company facing multiple large claims could become insolvent, potentially leaving investors exposed to heavy losses.
So, what should savvy real estate investors look for in a title company? Here are several factors to consider:
» Financial Stability // Consider whether a title company is backed by a strong parent company or with a proven track record of financial health. This may indicate adequate resources to pay claims and continue operations even in challenging times.
» Claims-Paying History // A reputable title company should be transparent about its claims-paying history. This may demonstrate their ability and willingness to stand behind their policies when issues arise.
» Customer Service // Responsive, knowledgeable customer service can make all the difference when navigating complex transactions or addressing title issues.
» Underwriting Knowledge // Experienced underwriters can spot potential issues before they become problems, helping to save you time and headaches down the line.
» Industry Relationships // Established title companies often have strong relationships with local recording offices, and other key players, which can help expedite transactions and resolve issues more quickly.
» Technology Balance // While technology can streamline processes, it should complement, not replace, a human counterpart. Look for companies that leverage tech wisely without sacrificing the personal touch.
» Regulatory Compliance // A good title company is fully licensed and compliant with all relevant state and federal regulations. This helps protect you from potential legal issues down the road.
If you rely heavily on your agent to select the title company, make sure you understand why they chose a particular title company. Often real estate agents are incentivized to choose certain title providers. Their brokerage may have an existing relationship with a title company, or the brokerage might receive financial incentive for referrals to an affiliated title company. Remember, the easiest option is not always the best when it comes to protecting your investments.
As we wrap up this inaugural Title Talk column, we want to share about who we are: Radian Title Services (which includes Radian Title Insurance, a title insurance underwriter and Radian Settlement Services, a title agency offering settlement services). Backed by Radian Group, a trusted name in mortgage and real estate for over 47 years, Radian Title Services combines financial strength with exceptional customer service. With Radian Group’s impressive $5 billion market cap and over 1,100 employees, investors can rest assured that Radian Title Services has the resources and stability to help protect their investments for the long haul. This backing provides peace of mind that your title insurance and settlement services provider will be there when you need them most.
In future columns, we will dive deeper into specific title issues, emerging trends, and strategies to help protect your real estate investments. Until then, remember: a strong foundation may start with a strong title company. Choose wisely, and happy investing.
For licensing information please visit www.radian.com/licensing-disclosure
