Last Updated on May 11, 2022 by Fair Punishment Team
Realizing your dream and starting a title company is a fantastic adventure that has the possibility to change your life.
However, to start a title company, certain steps must be taken to ensure everything is legal and above board.
Then there is the issue of planning your business strategy. Such factors as deciding your name, branding, target audience, company registration, licenses, and costs all come in to play. Where do you start?
Should you be thinking of taking a leap of faith and starting your own business, read on. This useful guide gives you all the key information on starting and running your own business.
We share step-by-step instructions, so you can start your own title company with total confidence. After reading this, you will have all the know-how to ensure you begin your startup the right way.
Success is just around the corner…
What Is A Title And A Title Company?
A title is a legal document showing ownership of a property. It is different from a deed. This is a legal document to show the transfer of said property ownership from one party to another.
When buying a property, you have a property deed and a title confirming ownership and rights.
A title company is the term given to a company that confirms and verifies the title of real estate has legally gone to the new owner of the property.
The title company’s role is crucial in the process of buying your property, as it ensures the seller can legally sell the real estate.
Following this confirmation of right to sell, the title company protects the lender (and the buyer) against potential future claims to this property via its title insurance.
Sometimes a title company will take charge of closing the real estate deal. It will keep escrow accounts with closing costs until you close your loan. However, this is not always the case.
So, you’ve decided to start your own title company. If you are a little confused where to begin, this guide will help.
Here are step-by-step instructions to make sure you have ticked every box for running a truly profitable business.
1. Plan, Plan, Plan.
Planning is everything. Having a well-thought-out plan will make the difference between failure and success for your business.
In order to map out a business plan (or model), you need to consider the following factors:
1. Your Business Name: What are you going to call your title company?
Who is Your Target Market?: A title company’s market are mainly homeowners and estate agents.
When thinking about your target market, consider points such as age range and lifestyle.
Ideally, your business name should reflect the tone of your target market.
Costs: What are the initial costs of your startup company? A title company requires licenses and certificates. These cost monies.
Also, there may be additional costs, depending on which state you reside. You may need input from a lawyer (more costs).
Launching and registering a Limited Liability Company (LLC) comes with costs.
So too, does the licensing exams, board certifications, bonding, and office space rental. After you have covered all of these important aspects, the entrepreneurial fun can begin.
Balance: Balance this out against the average annual wage of a title company, and you will feel a little easier about the initial outlay of costs. The average salary is about $60,000 per year.
2. Choose Your Business Structure
You must decide which business structure your title company will take. The choices are a partnership, sole proprietorship, LLC, and corporation. This step is crucial in the event someone wishes to sue your company.
3. Register For Taxes
Depending on the size and type of your business entity, you will need to register for taxes. Doing this ensures you are legally compliant.
To register for taxes, you must first apply for an EIN (which can be sourced on the IRS website).
4. Your Business Income
Once you launch your business, you will need a business bank account. A business bank account ensures there is no overlap into your personal account.
The outcome is less confusion, and should you get sued, your personal assets remain protected.
Always make sure you have the necessary licenses or permits required to legally run your business.
Failure to do so, may result in the discovery of a large, unwanted fine on your doorstep. Eek! Double-check the requirements and fees for your state
6. Business Insurance
Keep your business protected and within the law by making sure you purchase business insurance. General liability insurance provides good all-round coverage.
As your company grows, you will need to get different insurances to stay protected. This may be insurance to cover larger companies or insurance aimed at covering employees.
Once your business is ready to operate, the only thing you need to do is promote your business. Let people know the benefits your business can offer.
There are many ways you can market your new title company. Some sure-fire ways of getting noticed include having a website, local ads, and also delivering leaflets in the surrounding areas.
Ask your customers to rate their experience on your website. You could even email or telephone local estate agents to tell them about your business and the benefits you can offer.
Some businesses gain more exposure and custom through offering promotional discounts too.
Taking that leap of faith and following your dream can feel daunting and risky. There is no denying that starting a business such as a title company takes a lot of effort, time, and money.
However, the long-term benefits and success of your business depends on following correct procedures. By putting in this time, you will soon reap the rewards of your efforts.
Having read this guide, you will have all the necessary information and know-how to ensure your success.