Thinking of opening your own Title Agency?
Perhaps you are feeling the optimism of a stable and prosperous market, or maybe you are just tired of working for someone else. If so, it may be time to make the move to becoming your own boss and opening your own title company.
While the most obvious first steps include finding and setting up the right office space and hiring the right employees, there are just a few things you need to do prior. Consider these things that are often overlooked and could delay your path to success.
4 Steps to Take When Opening Your Own Title Agency
Get the Best Financing Possible. After preparing your vision for the company, your first step should be to look into financing. You need funds to operate the business and pay employees. Don’t just accept the first loan you can get out of convenience or because you happen to know that banker. This step will require you to provide information such as personal financial statements and submit to a credit check. Expect to do some leg work.Talk to a few business bankers who can offer different types of loan structures. For example, one bank may offer you a loan with little or no capital investment or assets on your part, but another bank may be able to offer deferred principal payments in which you make interest only payments.The point here is to make sure you are shopping around for the loan that suits your situation and that will put you in the best position to succeed sooner.
Update your Qualifications – Make sure you are fully qualified and insured to operate the practice. Is your bar license up to date? What about your title insurance license?You will need to be proactive in updating your contact information with the state bar, department of insurance or any other governing bodies that require this of you. At this point in the process, you should also be in touch with an underwriter or two that you want to write title insurance for. They will require that you apply to write for them and that you are properly covered with errors and omissions insurance. Other insurance, such as for wire fraud and cyber security issues, are usually optional but it is worth looking into.
Your Office Should be Alta Best Practices Certified – Once you have financing available and have a handle on the underwriter(s) you will work with, you should begin looking into becoming ALTA Best Practices Certified.Most lenders will only do business with companies that are Best Practices Certified because it reduces their risk as well. Among other things, you will need to have your underwriter lined up, have a secure location, and you will have to prepare your own policy manual that addresses things – such as safeguarding consumer privacy and handling consumer complaints.Then, comes the one-day onsite certification process from a third party. After the onsite evaluation, plan on taking a few days or even weeks to remedy any deficiencies.The entire process of certification could take between 4-6 weeks.
Prepare to Wear All Hats – This goes for anyone opening a small business, but you should be prepared to take on any role that is required for the company to function. You have to wear many hats. Outside of being the attorney and/or title agent, you may need to step into the role of the receptionist, closing officer, bookkeeper, human resources manager, sales and marketing team, janitor, etc.Once you get a handle on the day to day operation, you can decide where third party outsourcing or hiring an employee to fill a role would benefit your company without breaking the bank. Of course, you should hold your employees and contractors to a high standard, but keep in the back of your mind that no one is going to look out for your company like you would. The buck stops with you.
The hardest part for many new title agencies is actually starting the process. Good luck and if you have any questions, please reach out!