Six revenue lines, two of them capped by law and one that may not be yours at all. Here is how the money actually works in a title agency.
A title company does not make its money in one place. Understanding the mix matters before you open, because two of these lines are capped by law and one of them is not really yours.
You issue the policy on the underwriter’s paper and remit a share of the premium to them. The agent’s retained share is set by the agency agreement and by state law, and commonly falls somewhere between 70% and 90%. In some states the premium itself is promulgated and identical everywhere; in others it is filed by each underwriter and varies.
What you charge to conduct the closing, disburse funds and prepare the settlement statement. Unlike premium, this is usually yours to set, and it is where most agencies actually make their margin.
Charged separately in most states. If you examine in house rather than outsourcing, the spread between what you charge and what it costs you is real profit.
Additional coverages added to a policy, each carrying its own premium and its own split. Lender-required endorsements on commercial files can rival the base premium.
Document preparation, e-recording, wire and courier fees, notary and remote online notarisation. Individually small, collectively meaningful across enough files.
Heavily regulated and in several states not yours at all — interest may be required to go to the consumer or to a state programme. Never build a plan around it without checking your state’s rule.
Title revenue sits inside RESPA. Section 8 prohibits giving or accepting anything of value for the referral of settlement service business, and prohibits splitting fees except as payment for services actually performed. That is why title marketing looks the way it does: you can make a referral partner’s job easier, you can give them genuinely useful tools, and you cannot pay them for the file.
It is also why the practical growth lever is convenience rather than commission. Instant net sheets a Realtor can hand a seller, fee quotes a lender can pull without calling, and one-step online ordering are all things you can give away freely. A cheque is not.
Premium volume follows order count, and order count follows relationships. But the lines you control — settlement fees, search and exam, ancillaries — are the ones that decide whether a given file is profitable.
It is set by your agency agreement and by state law, and commonly falls between 70% and 90%. It is one of the terms worth negotiating when you take on a second or third underwriter.
Usually not in the same way. Premium is promulgated or filed depending on the state, while settlement and closing fees are generally set by the agency, subject to being reasonable and properly disclosed.
No. RESPA Section 8 prohibits paying anything of value for the referral of settlement service business. You can provide genuinely useful tools and service; you cannot pay for the referral.
It depends entirely on the state. Some require interest to go to the consumer or to a state programme. Confirm your state’s rule before treating it as revenue.
Settlement and search fees, because they are largely yours to set and they scale directly with file count once your process is efficient.
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