How to start a title company in Texas

Texas in one paragraph

The Texas Department of Insurance regulates title insurance under Title 11 of the Insurance Code and the Basic Manual of Rules, Rates and Forms. Premiums are promulgated, so every agent charges the same; policy and endorsement forms (the T-forms) are promulgated too. A title agent must be licensed by TDI and appointed by an underwriter, must own or lease an abstract plant for each county it writes in, must employ licensed escrow officers to handle closings, and must have its escrow accounts audited annually by a CPA with the report filed with TDI. Closings are conducted by the title company’s escrow officers. There is no real estate transfer tax. This page is the Texas layer on our general guide to how to start a title company.

Step 1: the title plant, because it decides where you can operate

Texas is unusual in requiring a title agent to own, lease or have a contractual interest in an abstract plant — a geographically indexed set of the county’s real property records — for every county in which it issues policies, covering at least the prior twenty-five years. In practice a startup does not build a plant; it buys plant access from an existing plant owner in each target county, and the cost and availability of that access is the first thing that determines which counties are realistic.

Line up plant agreements before anything else. TDI will want them on the license application, underwriters will want them on the appointment application, and the counties you can get plant access in are the counties your website should be built around.

Step 2: the entity and the TDI title agent license

Form the entity, register with the Secretary of State, get the EIN and the bank accounts. Then apply to TDI for the title insurance agent license. The application covers the entity, its owners and managers, the plant agreements, the escrow accounts, financials, and the underwriter that will appoint you; TDI reviews the owners’ backgrounds and the entity’s solvency. Texas also requires a bond or deposit as part of licensing, and underwriters layer their own financial requirements and E&O minimums on top — $1,000,000 per claim is the common ask. Our startup costs guide puts numbers to the whole list.

Step 3: the underwriter appointment

A Texas agent issues policies only as the appointed agent of a licensed underwriter, and the appointment is filed with TDI. The national underwriters and several Texas-focused ones all write here, each with its own application: financials, experience, plant agreements, escrow controls, E&O, and an interview. A first underwriter wants to see a realistic book of business — the Realtors, lenders and builders who will send files — before appointing a startup, and will expect the escrow controls to be in place before the first file rather than after.

Add a second underwriter in year one. Texas agents commonly write for two or three.

Step 4: licensed escrow officers

Every person who handles closings, signs closing documents or disburses escrow funds must hold a Texas escrow officer license from TDI, sponsored by the agent, with a bond. The owner is usually the first escrow officer; each additional closer needs their own license before they touch a file. Escrow officers are the public face of a Texas title company — Realtors follow them between agencies — so the website should show them by name from the day it launches.

Step 5: escrow accounts and the annual audit

Texas requires the agent’s escrow accounts to be maintained separately from operating funds, reconciled, and audited every year by an independent CPA, with the audit report filed with TDI. Underwriters add three-way reconciliations, positive pay, dual control on disbursements and wire verification procedures. Set the accounts and the controls up before the first file; the first audit will test whether you did.

Wire fraud is the risk that closes agencies. Build the verification procedure — every wiring instruction confirmed verbally on a known number, nothing sent or accepted by email — and build a website that never publishes wiring instructions. See how to keep wire fraud off your title website.

Step 6: rates, forms and the calculators that follow them

Texas promulgates both the premium and the forms. The Basic Manual sets the owner’s and loan policy rates by liability amount, the simultaneous-issue rate, the endorsement charges and the T-forms themselves, and TDI revises them periodically. Texas has no transfer tax, so a Texas closing cost estimate is premium, endorsements, escrow fee, recording and prorations — and the estimate on your site should say so, because buyers relocating from states with a transfer tax expect one.

Our Texas title insurance calculator runs on the current promulgated schedule, and the Texas title company website page covers the rest of what we build into a Texas site: T-form-aware endorsement pricing, escrow-officer intake and county pages.

Step 7: the website, before the first file

A new Texas agent has plant access, an underwriter and licensed escrow officers, and no referral history. The website is what a Realtor or a builder’s closing coordinator sees when they decide whether to try you. A Texas-configured premium and endorsement calculator, a seller net sheet, an order form that opens a file from a phone, the escrow officers by name, and a page for each county you have plant access in make a startup look like an established agency. Build it before you open, so the underwriter’s approval and your first outreach point to a site that earns the file. Title company website design covers what we build; pricing is month to month with no contract.