What are the differences between a title company, a title agency and a title research company?

Clients are often confused about what the differences are between a title company, a title agency and a title research company.  A title company is essentially an insurance company.  It underwrites and issues a title insurance policy to insure the purchaser of the policy against financial losses caused by defects to title that were not discovered and cured between opening of escrow and closing a transaction.  There are four major title company “families” in the United States: Fidelity National Title Group, First American, Old Republic Insurance Group and Stewart Title. There are also a few dozen independent companies in the United States that underwrite title insurance.

A title agency, also known as an escrow agency or settlement service company, processes real estate transactions, as do some law firms. Title companies also process real estate transactions, but not all title agencies underwrite insurance.  Instead, the entity must be insured and bonded in accordance with all applicable state and federal laws and appointed as an authorized agent of one of the underwriting title companies.  In some cases, law firms are appointed as authorized agents of a title company upon submitting an application and proof of the requisite credentials and professional liability insurance.  This is especially common in small communities where there is no title agency or similar office.

Title companies, and many agencies, have an attorney or a legal department for in-house legal issues, but they do not provide legal advice to title company clients.  They do, however, often provide or sell blank legal forms and offer services to assist in completing forms at the direction of the client.  The title company underwriters have numerous offices and authorized agencies throughout the United States and every title company, authorized agency or law firm services a given county or region.

A title research company provides title research services, document retrieval services, abstracts of title, lien reports, title searches, consulting and other real estate services for research purposes.  It does not provide escrow/settlement services, title commitments or issue title policies for purposes of closing transactions.

U.S. Title Records is a nationwide online title research company providing title and property record search services, document retrieval and consulting services packaged in flat fees and delivered in downloadable/printable format via email seven days a week, including holidays, 8:00 am – midnight, EST.  The services and products are delivered without the need for subscriptions, memberships or logins to commercial businesses and individuals within hours where the information is available digitally and within days where the information must be retrieved in person. The company does not provide legal advice.  However, their consultants have a real estate or legal background so questions are answered fully and promptly in writing.  The client base includes individual real estate investors, investment groups, real estate professionals, brokers/lenders, insurance companies, financial institutions, equity groups, law firms and the general public.

QUICK SUMMARY:

Title company or authorized agent:  Issues title insurance policies and provides settlement services. The procedure begins when the parties execute a contract and escrow is opened.  The company/agency then performs a title search and prepares a preliminary title report with a title commitment. Once the transaction is closed, the appropriate documents are recorded to make them public record. Title companies are used by buyers and (lenders) to close real estate transactions and protect against financial losses caused by defects on the title that were not discovered and cured before closing.  NOTE:  Some buyers (seasoned real estate investors, for example) choose to perform their own title searches and  close transactions without a title company, but buyers who are not prepared to accept potential title issues and the associated cost should evaluate that risk carefully.

Title research company:  Provides title search services and document retrieval and/or consulting services for research purposes.  It does not issue title commitments, underwrite title policies or close transactions.  Title research companies are generally used by real estate investors, investment groups, real estate professionals, brokers/lenders, insurance companies, financial institutions, equity groups, law firms and the general public as follows:

(1) Research before deciding to make an offer or bid;
(2) Quick and convenient document retrieval, including recorded document images, title searches, customized preliminary title reports without a title commitment or policy, chain of title reports, lien reports, valuation reports, area statistic reports, etc.;
(3) Professional real estate consulting (depending on the company).