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6 Questions a Title Company Owner Should Ask Before Outsourcing
Business Strategy Title Agent Tips

6 Questions a Title Company Owner Should Ask Before Outsourcing

Amanda Farrell

Owning or managing a title company or real estate law firm successfully requires a good balance between expertise in title production and the closing process as well as shrewd business acumen. The strength of the relationships with your lenders, underwriters, and real estate agents are dependent upon the quality of the title policies you issue.

As your company gains more clients and sees an increase in orders, you may be met with a difficult question: Should I hire more internal staff to handle the influx or consider outsourcing certain parts of my title production?

The answer will depend on an assessment of your current costs, the outlook of the real estate market, your region, your overall business goals, and outsourcing options.

Here are six questions to ask to help you decide if outsourcing is right for your title company, law firm, or underwriting operations.

Jason Somers of Land Castle Title Group explains how outsourcing aspects of property research helps stabilize their employee count and manage their workflows.



How to decide if title production outsourcing is right for your company…

Here are six questions to ask before you start looking for a due diligence partner:

  1. What is my current cost per file?
  2. How will the seasonal fluctuation in the housing market affect my expenditure and employees?
  3. Do I want to grow my company’s footprint?
  4. Do I plan to sell my title company at some point?
  5. What are the title production tasks that I should outsource?
  6. Who should I work with?


1. What is my current cost per file?

The first question requires a look at your current expenses. What are your current fixed costs, like the cost of your rent, employee salaries, insurance, and office supplies? What are your current variable costs for title production?

Being mindful of your fixed costs versus your variable costs will make managing a rapid increase or decrease in orders easier.

Hiring new talent will still require time for training and add to the overall cost per file order you receive even if your number of orders don’t steadily increase. Worse yet, a rapid decrease in orders after hiring and training new employees will have a greater impact on your profit margins.


2. How will the seasonal fluctuation in the housing market affect my expenditure and employees?

As Jason mentions in the video, working with a vendor for ancillary closing and post-closing tasks can help companies better predict what they will spend regardless of what the market does. For title companies, law firms, and underwriters of all sizes, this helps prevent a hiring spree when closings ramp up in the spring only to plateau or decline later in the year.

In order to avoid reducing the hours of new employees hired during the busy season to mitigate the decrease in orders, a better solution would be to work with a third-party. Fluctuations are common in real estate closings and follow a typical yearly pattern. So, companies can predict when they will start to slow down.

During the slow seasons, the tasks you outsource can be brought back in-house to keep your employees busy and minimize the impact on the cost per file. It will also help minimize uncomfortable conversations around employees going part-time.


3. Do I want to grow my company’s footprint?

According to our 2019 State of the Title Industry report, about 84% of settlement agents work for an independent agency. There’s a lot of local competition for title companies and real estate law firms. For those who are running successful marketing and sales strategies and steadily gaining new clients, you may be met with two problems: more orders than your current staff can handle and new territory with unfamiliar title and property search processes.

Outsourcing to a team with experience in these new areas can help solve both problems. Whether it’s preparing a title report, doing HOA research, compiling a municipal lien search report, or lien release tracking after the closing, the intricacies and nuances of every property are different. A good title professional knows that having expertise in that property’s area will mean better title clearance and ultimately fewer title claims.


4. Do I plan to sell my company at some point?

Investors and analysts consider businesses with a higher ratio of variable costs to fixed costs to be a safer investment. As their profit margin is less volatile and profitability and risk are easier to take into account based on a production basis. This will make your title company more appealing should you decide to sell or merge with another company in the future.

Watch our webinar with Turk & Co.’s founders, Howard Turk and Brett Story, for more on What You Should Know Before Selling Your Title Company.


5. What are the title production tasks that I should outsource?

Another revealing statistic from our 2020 State of the Title Industry report was that 71% of title professionals outsource their title searches, and 75% outsource municipal lien searches.

It’s common for many to outsource title searches to their underwriter while some will work with companies like PropLogix for additional due diligence reports like municipal lien searches. Depending on your relationship with your underwriter, this is a good place to start examining your title production outsourcing needs.

Other ways to optimize your workflow, include outsourcing tasks like UCC searches, Judgment searches, land survey coordination, HOA research, property tax searches, municipal lien searches, tax certificates, title curative services, and countless other services.

What you outsource will depend on your region, the time the task takes, and the liability associated with the task. For instance, in South Florida, preparing a municipal lien search report is vastly more complicated than other regions of the state. In some states, this type of search isn’t customary, and you may benefit from outsourcing tax certificates instead.

Some companies will find success outsourcing as many tasks as possible, like South Florida Closer, Alisha Ezell of the Law Offices of David Bauman, while others may find it easier to rely on a third-party for post-closing release tracking like Michigan-based Liberty Title.


6. Who should I work with?

There are lots of options out there! When choosing a vendor, some important considerations are obvious like price, reliability, and expertise.

If you want to learn more about what your peers in the title industry are doing, be sure to download our third annual State of the Title Industry report. In the report, you’ll find more information on what services settlement agents are outsourcing and why.



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Amanda Farrell Content Marketing Strategist

Amanda Farrell is a digital media strategist at PropLogix. She enjoys being a part of a team that gives peace of mind for consumers while making one of the biggest purchases of their lives. She lives in Sarasota with her bunny, Buster, and enjoys painting, playing guitar and mandolin, and yoga.