Before adding title services to your real estate brokerage as a way to earn additional revenue, understand the legal responsibilities, compliance obligations and professional liability that come with the role. 

Federal laws surrounding core title services — Some title companies market the process as simple, suggesting little or no prior experience is needed and everything can be learned quickly. The reality is far more complex. Federal law, including the Real Estate Settlement Procedures Act (RESPA) and guidance from the Consumer Financial Protection Bureau (CFPB), requires that to be compensated, title agents must perform meaningful core title services. Simply referring business, ordering a title commitment or reviewing work performed by someone else is not enough. 

CFPB guidance defines core title services as: 

• evaluating the title search; 

• determining whether title is insurable; 

• clearing underwriting objections; and  

• issuing the title commitment and title policy on behalf of the title insurer.  

Compensation cannot be structured as a disguised referral fee or fee split when the title agent is not performing the substantive work. 

Title examination — Far from just processing paperwork, the title examination is at the center of the title agent’s responsibilities. It is not an administrative function; it is a legal analysis requiring careful review of public records and other documents affecting ownership rights. A title agent must identify defects in the chain of title, liens, easements, encroachments, probate issues, municipal violations, restrictive covenants, survey matters,and other issues that could affect ownership. The agent must also determine what is required to resolve those issues before closing. 

Legal and financial responsibility — When a title agent concludes a title is insurable, that agent is making a professional underwriting decision that carries significant legal and financial responsibility: 

• Title agents assume direct responsibility for the quality of the title examination.  

• If a defect is overlooked or title is incorrectly determined to be insurable, the consequences can be significant.  

• The title insurer may seek reimbursement under the agency agreement, regulators may investigate, and the agent may face errors and omissions claims or other civil liability.  

• More importantly, mistakes can impair a homeowner’s property rights and create legal problems long after closing. 

Affiliated business arrangements and joint ventures — Brokers should carefully evaluate these structures and be aware of strict RESPA-imposed requirements. Legitimate affiliated businesses must be independently capitalized, operate as real businesses with their own employees and compensate owners through a return on their ownership interest — not disguised referral fees or title commissions. These arrangements require careful planning and ongoing compliance. 

Disclosure obligations — Brokers serving as title agents are required to disclose that they have a financial interest in the title services being provided and will receive compensation beyond the real estate commission. 

Knowledge, training, experience — There is a reason property law occupies a significant portion of every law school’s curriculum. Experienced title professionals and real estate attorneys spend years developing the knowledge and judgment necessary to identify title defects, assess legal risks and make insurability decisions. 

Ultimately, title insurance is about far more than issuing policies. It is about protecting buyers before problems arise. Becoming a title insurance agent is not simply another revenue opportunity, it is accepting responsibility for legal and underwriting decisions that affect one of the largest investments most consumers will ever make. 

Partnering with experienced real estate attorneys and title professionals remains the best approach, allowing brokers to focus on serving their clients while relying on specialists to determine whether a title is truly marketable and insurable. 

Hank Shulruff is executive vice president and chief growth officer at Advocus National Title Insurance Company. Advocus, formerly known as Attorneys’ Title Guaranty Fund, Inc. (ATG), has been a leading title insurance underwriter and settlement services provider in Illinois since 1964 and has a growing presence in markets across the United States. ATG, now Advocus, is dedicated to the belief that every consumer involved in a real estate transaction deserves legal representation and advocacy throughout the process.