A shady title company can leave you holding the bag for legal issues, undisclosed liens, or missing documents weeks after closing. The escrow process protects both buyer and seller, but only if your service provider has the expertise and integrity to handle it properly. Knowing what to watch for can save you thousands in headaches—or worse, a failed transaction.
When the Company Won't Communicate
Title and escrow work moves fast. You should expect responses to emails within 24 hours and phone calls returned the same business day. If your escrow officer goes silent for 48+ hours during an active transaction, that's a problem—especially when you're counting down to a closing date.
Red flag: A company that requires you to contact them only through a general inbox with no assigned point person. You need one escrow officer who knows your file inside and out.
Vague or Hidden Fee Structures
Legitimate title companies provide a written Closing Disclosure at least three business days before closing. If they're being cagey about costs or charging fees that don't appear on your official documents, walk away.
Typical title insurance and escrow fees run between $500–$1,500 depending on your purchase price and state, but the exact breakdown should be crystal clear upfront. Watch for:
- Surprise "processing fees" or "administrative charges" that appear only at closing
- Refusal to provide an itemized quote in writing
- Pressure to use their preferred lender or attorney without explanation
Insufficient Experience or Outdated Systems
Ask how long the company has been in business. New startups in title and escrow can mean inexperienced staff handling complex property records and legal requirements. You want at least 5+ years of established operation.
Also ask whether they use modern title search technology. A company still relying on manual record-checking or paper files is a liability. Digital title searches are faster, more accurate, and less prone to missing liens or encumbrances that could tank your deal.
Red Flags Around Title Insurance
Title insurance is non-negotiable in most states. The company should explain what it covers and doesn't cover. If they downplay its importance or suggest you can skip it to save money, they don't understand their own job.
Ask about their title insurance underwriter. Major underwriters include Fidelity, First American, and Old Republic. If they won't name their underwriter or use an obscure one with no reputation, that's a warning sign.
No Clear Document Handling Process
Escrow involves holding earnest money, coordinating inspections, managing disclosures, and ensuring all parties sign required documents in the correct order. The company should walk you through their exact process in writing before closing.
Specifically, ask:
- When will you receive the Closing Disclosure for review?
- How do they handle document corrections if something is wrong?
- What happens if one party doesn't sign on time?
- Who holds the earnest money deposit, and in what type of account?
Vague answers here are dangerous. Mishandled documents can delay closing by weeks.
Pressure to Close Quickly or Cut Corners
A legitimate title company will never push you to close before you're ready or suggest skipping steps to "speed things up." Title work takes time—proper searches, clearing title issues, coordinating with lenders and attorneys, and ensuring all paperwork is correct.
If they're pressuring you because they're understaffed or behind, that's a sign the company is overstretched.
Lack of Licensing or Credentials
Verify that the company and its individual escrow officers are properly licensed in your state. Every state has different requirements; some require bonding, E&O insurance, or trust account audits.
Use your state's real estate commission website or Department of Financial Regulation to confirm licensing. An unlicensed escrow company offering services is illegal and leaves you completely unprotected.
No Clear Complaint Mechanism
Ask what happens if something goes wrong. A reputable title company should have a formal complaints process, carry errors and omissions (E&O) insurance, and be willing to discuss how they've resolved issues in the past.
If they get defensive about the question or refuse to answer, that's a bad sign.
Frequently Asked Questions
Q: What should I look for in an escrow officer's background? Look for at least 5+ years of title and escrow experience, state licensing in good standing, and familiarity with your specific property type (residential, commercial, investment). Ask for references from recent clients.
Q: Can I switch title companies mid-transaction? You can request a change, but it's complicated and may delay closing by 5–7 days because the new company needs to restart the title search and review. Avoid this by vetting the company thoroughly upfront; services like Mercoly let you compare and find trusted title and escrow providers in one place.
Q: What's a reasonable timeline for receiving the Closing Disclosure? By law, you must receive it at least three business days before closing. If they deliver it the day before closing, that's a violation and grounds for delay.
Use Mercoly to compare title and escrow services in your area and read verified reviews from past clients before choosing.