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Title Companies

The sector at a glance

Title companies insure ownership and finance the moment property changes hands: they search the public record, issue a title commitment and then an owner's or loan policy, hold earnest money and loan proceeds in escrow, clear the defects that would otherwise stop a sale, and conduct the closing at which deeds and deeds of trust are signed, funded and recorded. The industry is layered — a handful of national underwriters carry the risk and set the policy forms, while thousands of independent title agencies and escrow offices do the search, curative, closing and disbursement work in exchange for a share of the premium. Texas is the most regulated title market in the country: the Texas Department of Insurance promulgates both the premium rates and the policy and endorsement forms, so no Texas title company can win business on price. Competition runs entirely on turn time, curative skill, escrow-officer relationships, closing experience and fraud prevention. Buyers are rarely 'title people' — they are real estate agents and brokers choosing where to send a file, loan officers who need a clean commitment before a rate lock expires, builders closing lots on a schedule, investors and 1031 exchangers, commercial developers, and the consumers who show up once every seven years and have never read a Schedule B.

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