Selecting a title company to provide title insurance and closing settlement services is one of several key elements to a successful real estate transaction. The largest single financial transaction that a person makes is often the purchase, sale or the refinance of their home. The importance of any settlement service to a real estate transaction cannot be overlooked. The use of a qualified title company will go a long way in making sure that your real estate transaction closing will be a smooth and enjoyable experience. Deciding how to proceed when choosing a title company should be a result of careful consideration.

The costs of title insurance and related closing services can vary dramatically, even though the industry is regulated and all title rates and closing fees are required to be filed and made available for review. That’s why real estate professionals and consumers need the most comprehensive information to be able to make an informed decision.

In Colorado, there are approximately 20 actively issuing licensed insurance companies, providing their title insurance policies directly or through a network of licensed title agencies, offering title and closing services for all of Colorado’s 64 counties.

Title insurance is designed to protect a person’s interest in real property from financial loss due to omissions or errors in the title itself. In layman’s terms, this insurance protects buyers from any dispute that may arise regarding their interest and rights to own the property in question. If a future problem does occur, the title insurance company must pay for damages under the terms of the title policy.

The closing/escrow service that a title company performs to consummate the real estate transaction is as important as the title insurance policy, if not more so. However, it is typically the closing service of a title company that is most recognized and understood by the consumer and real estate professional.

As a consumer or real estate professional, you will need to do some homework and comparison shopping before selecting a title company, just as you would do in the selection process for any other product or service. The following business points should assist in understanding more about title insurance and the closing services whether for yourself or in making an educated recommendation to your client:

Product - Title insurance policies forms and standard base coverages, terms & conditions and exclusions are developed by the American Land Title Association (ALTA) and issued by all title insurance companies and their agents. Always request a policy with extended coverages (i.e. deletion of pre-printed title exceptions). Visit www.Demotech.com to check out ratings and performance of title insurance underwriters.

A very important aspect to the coverage of your policy is the title exceptions that are initially listed on Schedule B-2 of the title commitment. A reasonable search and examination of the public records will typically reflect all applicable title exceptions (except for company pre-printed or standard title exceptions) by specific identifiable reference, such as a book and page, reception number or a dated but unrecorded document. One should always question those title exceptions that are general in content and don’t reference a specific book and page or reception number, as it may negate coverage due to an insufficient search and examination of the public records by the title company.

Service – Professionalism, knowledge, communications, accuracy, and timeliness in the preparation of title and closing documents are key factors to be considered in the overall process. Quality service also includes making sure the title company provides you with signed copies of all your closing documents for future reference or tax purposes.

Convenience – Multiple office locations and use of advanced technology in providing services benefit consumers. However, this convenience may result in higher title rates and closing fees charged by some title companies.

Company Experience & Reliability – How long has the title company been in business, or if a new company, what is the experience of its management and employees? Learn more about the title company by visiting their website, by contacting the Better Business Bureau, Colorado Division of Insurance and by requesting a reference or two that will share comments of their recent experience.

Consumer Protection – – Protecting the privacy of your information, your real property interests and the proper disbursement of your monies are key elements of a safe real estate closing. Make sure the title company has the following business insurance coverages that will protect you and your transaction.

Professional Liability / Errors & Omissions Insurance – Provides assurances to you that the title company is reputable in protecting itself from claims if you hold the title company responsible for errors or the failure of their work in services performed.

General Business Liability Insurance – Provides assurance to you that the title company is reputable in its business practices to protect itself and you from injury, property damage, theft claims, and other actions.

Fidelity Insurance - Protects you and the title company from loss of money as a result of crime, employee dishonesty, embezzlement, forgery, robbery, safe burglary, computer fraud, wire transfer fraud, counterfeiting, and other criminal acts.

Closing Protection Letter – Commonly known in the industry as a “Closing Protection Letter”, this letter is almost always requested by lenders and issued by a title insurance underwriter, which provides the lender with additional protection and assurances. This protection provides coverage against loss from the failure of the underwriter’s designated title agent to comply with written closing instructions and the fraud, dishonesty and negligence of the title agent in the handling of monies and documents in connection with the closing. A seller’s and/or buyer’s Closing Protection Letter may at the discretion of the individual title insurance underwriter be obtained upon request. Click here to view samples of Closing Protection Letters.

It is essential that you or your real estate professional request that your selected title company‘s underwriter issues a “Closing Protection Letter” or a “Certificate of Liability Insurance” evidencing the title company’s coverage of General Business Liability Insurance, Professional Liability and Fidelity Insurance protecting you against fraud, dishonesty or negligence of the title company in handling your funds or documents in connection with the closing of your real estate transaction.

Costs – Keep in mind that the costs can vary substantially and costs does not necessarily equate to a better product or higher level of service. Remember to shop and compare prices for each transaction as qualifying discount programs vary from company to company.

myTitleIns.com can now provide you a start in determining how to make an informed decision. We also recommend visiting the company's website for valuable information as well as interviewing the company. Make it a practice to take time an educate yourself and continually re-evaluate the title companies in your area. You owe it to your clients and yourself.