Quick Answer
Changing title companies after opening escrow is possible in some cases, but it depends on the purchase contract, the consent of all parties involved, lender requirements, and applicable law. Switching companies can cause delays and additional costs, so it should not be done lightly.
Once escrow has been opened and title work has begun, switching to a different title company is possible but rarely simple. Here is what you need to know.
Check the Contract First
The purchase contract may specify who has the right to choose the title company and under what circumstances. If the contract gives one party the right to select, that party may also have the right to request a change. If the contract requires mutual agreement, both parties must consent to the switch.
What Happens to Earnest Money?
Earnest money is typically held by the title company or escrow agent. If you switch companies, the earnest money must be transferred to the new company. This requires cooperation from all parties, including the current title company.
What About Work Already Completed?
The first title company has already performed work: opening the file, beginning the title search, and possibly preparing the commitment. If you switch, you will likely need to pay for the work already completed, and the new company will need to start from scratch (or arrange to take over the existing work, which is not always possible).
Could Changing Companies Delay Closing?
Almost certainly yes. The new title company will need to perform its own search and examination, prepare its own commitment, and work through the process. This can add days or weeks to the timeline, depending on where the first company was in the process.
What About the Lender?
The lender must approve the new title company. If the lender had already approved the first company, they will need to approve the new one. Some lenders have restrictive approved-provider lists that limit your options.
When Might Changing Make Sense?
Despite the complications, there are situations where switching may be warranted:
- The first company is not communicating or responding to requests
- The first company lacks experience with your type of transaction
- The first company made significant errors or omissions
- There is a conflict of interest that was not previously disclosed
- The parties mutually agree that a different company would be better
Key Takeaway
Changing title companies after opening escrow is possible but complicated. It can cause delays, additional costs, and require consent from all parties. Most transactions do not switch companies unless there is a compelling reason. Choosing the right company from the start is always the better approach.
FAQs
Can I change title companies if I am not happy with the service?
You can raise your concerns and request a change, but it requires the agreement of the other party and the lender. Sometimes expressing concerns to the current company leads to improved service without the disruption of switching.
Who pays for the work already done if we switch?
This is negotiable. Typically the party requesting the change pays for the work already performed. However, if there was a valid reason for the change (such as an error or lack of experience), the first company may not charge for its work. This should be discussed with both title companies and the parties to the transaction.