Does it Really Matter What Title Company I Use?
A similar question would be “Does it matter if I wear my shoes on the correct feet?” Sure, you could put your shoes on the wrong feet… but it is going to be painful and leave blisters.
In a perfect world, everyone would be good at what they do and everyone would do their job right the first time… and money would grow on trees, right? Back to earth… title companies are made up of human beings and human beings make mistakes… therefore, the only logical conclusion is that title companies too will make mistakes. The problem is that when title companies make mistakes, very bad things can happen.
Let’s start at the beginning by defining what a “title company” is in the first place. In short (and perhaps overly simplified), a title company is an organization (typically an LLC or corporation) that is licensed by the State to serve as an agent of each of the parties involved in a transaction for the purpose of receiving and disbursing the assets being transferred according to the terms of the contract. Now in more understandable terms… a title company simply takes the money from the buyer (or more often, from the buyer’s lender) and the deed from the seller and then disburses the money to the seller while at the same time handing over the deed to the property to the buyer. The idea is that everyone receives what they bargained for at the same time. The buyer gets the deed when he pays and the sellers gets paid when she signs over the deed… Sounds fair, right?… and most of the time, it is.
The problem is that title companies perform two other very important behind the scenes functions. In preparing for a closing, a title company also serves as a coordinator for any lenders involved in the transaction (both those lending money and those being paid) and prepares the legal documents required to consummate the transaction (sometimes this is done by an outside attorney or other staff person). Point being, both of these two important aspects of closing require that the title company is competent and intentionally attentive to the details. It seems simple enough, right?… that people hired to carefully process paperwork would carefully do so… Unfortunately and surprisingly often, real life is simply not so…
A perfect example is a closing we had a year or two ago with a title company we have refused to use ever since. We had a great customer who bought a home from us, but when we signed the deed, we failed to notice that the person at the title company who prepared the deed had inserted the legal description for both the home we intended to sell and a vacant lot we owned in the subdivision. The effect was that we theoretically sold both the home and the lot to our customer. Not cool. What made matters worse is that when we found the error many months later, the title company that prepared the deed blamed it on an attorney they had hired and the attorney basically said that he did what he was told and that our office should deal with the title company (this is called childish “it wasn’t my fault” nonsense). I will refrain from naming the parties involved (although I am tempted to warn all of you faithful bloggers who have tuned in). We eventually got the matter resolved after we paid our own title company to prepare the required correction document and our very honest and helpful customer signed the correction document (deeding the vacant lot back to us).
The lesson is this… just because someone’s job is to be careful and meticulous does not mean they will be careful or meticulous. Unfortunately, as a homebuyer, you could find yourself in a very similar situation to the experience we had without even realizing it. A slight error in the way a document is prepared or executed could result in great loss, unnecessary stress, and just plain frustration in the future.
Buying a home should be a pleasant, comfortable, and error-free process and knowing which title company to use is key to making this happen. While I am not getting paid to advertise this (donations are accepted), I will offer that in the Knoxville, Tennessee area, the best title company we have found to date is Title Associates of Knoxville run by a wonderful lady whose name is Sue Benson. She is VERY organized, VERY courteous, VERY knowledgeable, and she knows how to get things done. If you are closing a transaction in or around Knoxville, I definitely recommend that you give Sue a call. The TAK website is http://www.taknox.com/.
If you are not in the Knoxville area, my recommendation is that you research title companies in your area before you put a contract on a home and then make sure that your title company is named in the contract as the location at which the transaction is to be completed. Many builders will promote a title company they prefer because they receive discounts on their closing fees and for other such less than above-board reasons. From your perspective, you want someone who is going to get the job done right. The best way to find a good title company is to ask your friends and family in the area who they have used in the past and whether their experience was good or bad and whether the staff was organized or not etc. Apart from that, make darn sure you read the paperwork carefully. Mistakes do happen.
Jordan Mollenhour
