Purchasing Title Insurance: Real Estate Attorney vs. Title Company

In order to protect yourself against a loss on your property due to title defects, you should obtain title insurance for your property. For those looking to hire someone who provides title services, it’s important to know your options. Title insurance companies can process some real estate closings and issue title insurance policies, but there are quite a few limitations that prevent them from providing the right assistance when special circumstances arise. Real estate attorneys, however, can provide both title insurance AND legal services, including legal advice for problems that come up as well as processing the real estate transaction – from start to finish. The best part: you may even save money by hiring a real estate attorney.

Read on for our list of the top five reasons that you may want to choose a real estate attorney over a title company to provide you with title services.

1 | Real estate attorneys work and advocate for the person who hires them.

A title insurance company works for the title insurer, NOT the buyer or seller. However, once hired, a real estate attorney represents their client throughout the entire process, overseeing the real estate transaction to completion. In addition, they serve as an advocate for their client. The title company’s goal, rather than looking out for what is in the best interest of the client, is to prepare the basic closing documents required by the title insurer to complete the transaction and issue the title insurance policy.

2 | A real estate title company does not actually insure the title to your property.

Title insurance policies can only be issued through an authorized title insurer in the State of Florida. The term “title company” refers to a business that offers services like closing real estate transactions and facilitating the issuance of title policies through the authorized insurer. If hiring a real estate attorney, they can issue title policies and close transactions in the same way, but they also provide several additional services that title companies cannot.

3 | Title agents do not have law degrees.

A title company does not and CANNOT provide legal representation or advice related to your real estate transaction. When there are problems or questions, the buyer/seller can’t turn to the title company for help or advice. One of the most common issues that comes up is choosing the right type of ownership on the policy, which has both legal and tax ramifications. A title agent cannot provide advice in this situation, but an attorney can. Buyers, sellers, and realtors all benefit from working with attorneys since the attorney can review the contract and answer legal questions during the contract negotiation process; title companies cannot.

4 | Title agents cannot address problems with contracts or other legal issues that affect the title.

They cannot create or add to contracts, address concerns with contracts, work with non-standard forms, or correct legal issues. This is important because if a problem arises, corrective documents may need to be obtained or created. Title agents also cannot provide legal advice on the best way to handle the problem and prepare the necessary documents, but attorneys can. Depending on the issue, a title agent may have to send parties out to hire an attorney (at an additional expense) to handle specific problems. If you don’t already have an attorney, it can delay the closing or even cause the transaction to fall apart completely.

5 | The costs of an attorney and title company are comparable. 

Several closing costs such as title insurance premiums, documentary stamps, and recording costs are set by the State of Florida. They are the same whether an attorney or a title agent facilitates the process. Sometimes, using an attorney can actually save the parties money by performing double duty as an attorney and a title agent; a title agent cannot do the same.

For more property-buying tips from a real estate attorney, check out our recent blog post here. And before making a decision on who will handle your real estate transaction and title insurance policy, give our office a call by clicking the link below to see how Cona Law might be a good fit for you.