How to Start a Title Company

Learn the key steps to starting your own title company and how to keep your brand and customers secure.

How to Start a Title Company

Learn the key steps to starting your own title company and how to keep your brand and customers secure.

How to Start a Title Company
Written by:

Tom Cronkright

Read time:

6 minutes




Sep 13, 2022

The real estate industry has always been a dynamic, fast-paced business, but with the introduction of new digital technologies and tools, every facet of the home-buying process is looking dramatically different.

These changes have made it easier for consumers to learn about properties, connect with real estate professionals, and even handle the once-dreaded closing process.

With these digital stars aligning, for those interested in getting into this rewarding part of the real estate industry and learning more about how to start a title company, this article has an overview of all the key points you need to know to jump-start the process.

Follow these key steps to starting a title company.

While every state and even each city may have different requirements and rules for entering the title industry, generally those entering the business have to follow a few steps: 

1. Research the title company requirements for your area.

To protect both title agents and their customers, each state has its own set of insurance requirements.

These requirements may include:

  • Obtaining title agent licensure and/or completing relevant training courses
  • Holding the necessary insurance and bond coverage
  • Meeting financial stability standards
  • Proving legal oversight of title-related documentation and workflows
  • Holding proof of legal business registration with the relevant jurisdiction(s)
  • Completing a background check

To develop your own to-do list, the National Association of Insurance Commissioners created a state-by-state summary of relevant insurance laws and compiled a complete listing of state insurance department websites.

2. Prepare for the title insurance exam.

Depending on their state, each title agent may be required to take a pre-licensing course and exam. 

To help get started, many states can provide a list of preapproved courses and training providers to ensure you complete the necessary classes to sit for the licensing exam.

While the length and topics can vary, the licensing exams themselves will cover topics such as:

  • Insurance regulations
  • General insurance concepts
  • Title insurance principles
  • Title exceptions 
  • Procedures for clearing a title
  • Other facets of real estate transactions
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3. Research surety bonds and E&O insurance.

With your title insurance exam preparation underway, title companies are usually required to carry a fidelity bond and/or a surety bond of generally no less than $50,000. Surety bonds ensure that a title company can fulfill its financial obligations to its customers in the event that something should happen to your company during the closing process. Surety bonds range in coverage from 10-20 percent of the title agency’s net worth and can range from $200-$1,000 in cost per coverage period.

Most states also require errors and omission (E&O) insurance, which provides similar coverage as professional liability insurance, in an amount not less than $250,000. In the event of a mistake or accidental mishandling of the title clearing process, E&O insurance will cover the title agent against a claim of professional negligence.

4. Choose the right title insurance underwriter.

A critical part of the title transfer process is completed by a title insurance underwriter. This person is responsible for researching the chain of a title for any issues that could present the new owner with any legal challenges to the property, such as liens, judgments, legal description problems, or marital or inheritance rights. 

Because of the potential legal and civil issues that could arise in the event of a title issue, title agents should work to find their own experienced in-house or partner title insurance underwriter.

5. Get licensed.

Once you have completed all your state’s licensing requirements, it is time to apply for a license and officially open your business. Congratulations! 

Bonus: Get the right tools for the job.

With the rise in wire and real estate fraud, real estate professionals are under increased pressure to protect their businesses and their customers’ interests.

One of the most powerful ways to mitigate the risk of wire fraud is to choose an industry-leading platform such as CertifID, which provides end-to-end encryption during key data collection phases of the closing. 

CertifID can also bring other benefits to your title company, including:

Get started safely with CertifID.

Starting and building your title company is an exciting professional journey, one that has the potential to help countless others enter a new chapter of their lives in a new home or property.

Now that you know how to start a title company, make sure you are protecting your business and your customers from the beginning by tapping into the power of CertifID and also by ensuring that you have all of the necessary security protections in place. 

We have all the key information you need to know about taking your security to the next level in our guide, Cybersecurity Measures You Can Implement To Protect Your Business.

Are you a victim of wire fraud? Get help from our team of recovery experts.
Tom Cronkright

Co-founder & Executive Chairman

Tom Cronkright is the Executive Chairman of CertifID, a technology platform designed to safeguard electronic payments from fraud. He co-founded the company in response to a wire fraud he experienced and the rising instances of real estate wire fraud. He also serves as the CEO of Sun Title, a leading title agency in Michigan. Tom is a licensed attorney, real estate broker, title insurance producer and nationally recognized expert on cybersecurity and wire fraud.

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