A title abstract company can be a great business venture, because it provides essential services in communities where the buying and selling of property occurs. Title companies are responsible for researching property ownership and any liens on the property so that when a property is sold to a new owner, it is transferred without any pending liens. A title company also provides the legal deed, which is the document that transfers ownership of the property from the old owner to the new owner. One of the keys to a successful title service is reliability, and a dependable title company can quickly gain respect and expand. With a few straightforward steps, a motivated entrepreneur will be able to create and run a thriving title business.
Learn or review title law requirements. Contact your state's department of insurance to obtain a copy of the most up-to-date laws regarding the recording of real estate titles. Because most title companies are responsible for recording the title (ownership) change at the courthouse, it is essential that the company owner be aware of the legal requirements to avoid inaccurately recorded titles. Also, lenders rely heavily on the information that the title company provides, and a buyer's ability to purchase a piece of property might depend on the legal accuracy of the title company's work. As a result, the title company has a significant role to play in making sure that the transaction is completed according to the law.
Obtain your law degree or take real estate law classes. Many title company owners have legal degrees or previous experience working in a title company. The work itself is complex and requires knowledge of property laws and the legal requirements for property to be sold. If you do not have a legal or title background, take some real estate law classes or courses at your local community college or online to provide you with the knowledge you need to run a title abstract company. Some states require certification. Check with the state business licensing office for certification requirements.
Plan for and hire a staff. A title abstract company needs at minimum someone who is qualified to search titles, as well as a title examiner, someone qualified to issue the title policies and a closing agent. Title companies might also elect to hire their own surveyor, although many simply contract this work out. Be sure to establish a relationship with a reliable survey company, because the property survey will determine the new owner's responsibility for and physical limits of ownership.
Research the details of title abstract work carefully. A title company is responsible for a variety of details that must occur before a piece of property can be transferred. Title abstract work is related primarily to researching the history of a piece of property and locating all documents that relate to previous ownership and any potential liens on the property or hindrances to that property changing hands. Title companies are also responsible for surveying a piece of property, verifying that property taxes and all utility payments are up to date, providing title insurance for the owner and the lender (to protect against any claims against the title that might appear later on), assembling the documents to close on a piece of property and recording the transaction within the local or county legal system.
Market your business to referral sources. One of the best ways to establish your new business is to get in touch with local real estate offices and market your services to individual real estate agents. Real estate agents tend to be a source of repeat business. They also tend to use a single title company for their business when they establish a rapport with a dependable title company. Align your business with as many real estate agents and offices as you can and you will soon have a line of consistent business.
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