How to Start a Title Company

Start a title company by following these 10 steps:

1. Plan your Title Company
2. Form your Title Company into a Legal Entity
3. Register your Title Company for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Title Company
6. Get the Necessary Permits & Licenses for your Title Company
7. Get Title Company Insurance
8. Define your Title Company Brand
9. Create your Title Company Website
10. Set up your Business Phone System

We have put together this simple guide to starting your title company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a title company?

Opening a title company primarily involves the cost of licenses and certifications you’ll need to operate as a title agent. Make sure you’re familiar with all the legal ramifications for operating a title company in your state, and consider hiring a lawyer to help ease the paperwork burdens. 

You also will need to form a limited liability company (LLC) and register your company. Other essential start-up costs include licensing exams, board certifications, securing company bonding, and renting an office space. Once licensed, bonded, and insured, you may start operating.

What are the ongoing expenses for a title company?

Title companies typically have low overhead costs and expenses. Office supplies and employee salaries represent the majority of the ongoing expenses along with utilities and mortgage or rent.

Who is the target market?

Title companies typically target homeowners and real estate agents in and around their local area.

How does a title company make money?

Title companies collect fees for the work they perform in the sale, acquisition, and transfer of homes and properties. Sometimes, those fees represent a percentage of a property’s overall value while title companies also may set standard fees for their services.

How much can you charge customers?

Title company fees will fluctuate, depending on the state in which they operate. But, around $300 is the average cost for their services.

How much profit can a title company make?

Title company agents often average around $50,000 to $65,000 annually with some companies capable of generating revenue in the six-figure range.

How can you make your business more profitable?

Some title companies provide additional services, such as land, home, and building inspections. Others also enable clients to hire them to sort out deeds and ownership disputes.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your title company is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a Title Company. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Because of the legal nature and proceedings involved in operating a title company, many owners come from legal backgrounds. Prior experience in real estate, banking, and finance also can prove beneficial when starting a title company.

What happens during a typical day at a title company?

Title companies process home or building sales and acquisitions regularly. From researching land and buildings to performing title searches, following up with inspections, managing escrow accounts, and meeting with clients, a title company owner can have quite a busy schedule throughout the day. Clients also employ title companies to help them prepare a property for sale, usually by advising on potential upgrades and safety concerns.

What are some skills and experiences that will help you build a successful title company?

Because title companies handle property and home sales, their owners must be experts in the field’s current laws and legal proceedings. Having a background in law or an extensive knowledge of the rules and regulations of title procedures is critical.

A strong attention to detail and thoroughness in your paperwork also is necessary to avoid costly missteps in the title process.

Successful owners of this type of business also have excellent communication and client relationship management skills. You’ll need the ability to keep lots of pertinent information in focus and feel comfortable explaining the title process to clients in different methods, depending on their personalities and abilities.

What is the growth potential for a title company?

Title companies are popular because of their operational requirements (e.g., licensing and board certification) as well as their potential for above-average earnings. Check to ensure your market isn’t flooded with existing title companies or target a specific clientele you want to serve. If you’re eager to work, you should be able to find clients because titles constantly change ownership. You’ll just need to make sure you can drum up some initial clients to get you started.