The Differences Between Using a Real Estate Attorney vs. a Title Company

As a Michigan real estate attorney, I often hear one common question from buyers, sellers, and lenders. What is the real difference between a real estate attorney vs. a title company in a transaction, and do you actually need both? It is a fair and important question. Both professionals play a role at the closing table, but their duties differ fundamentally.

Understanding this distinction can protect you from costly mistakes. It prevents unresolved legal issues and surprises that surface long after the keys change hands.

In Michigan, you can close a real estate transaction without hiring an attorney. However, title insurance is not optional if you finance the purchase. While a title company handles the administrative and insurance side of a transaction, only a licensed real estate attorney can answer true legal questions. Consequently, knowing which professional to call is a highly practical step for any buyer or seller.

What Does a Title Company Do?

A title company serves as an independent third party in a real estate transaction. It remains separate from the buyer, the seller, and the mortgage lender. Its primary job is to verify that a legal title to a property is legitimate. The title agent ensures that the seller holds the clear right to transfer ownership.

To accomplish that task, the title agent conducts a comprehensive title search. This process requires reviewing public records to trace the ownership history of a property.

Through the title search, the title agent identifies any liens, judgments, or unpaid taxes attached to the property. They look for any gaps or defects that could block the transfer of title. Title search fees vary from transaction to transaction. If the title appears clean, the title company issues a commitment to insure. Finally, they provide a title insurance policy at closing.

The Title Search and What It Uncovers

A thorough title search will typically reveal hidden issues. Common problems include unresolved liens from prior owners, clerical errors in prior deeds, claims by missing heirs, and unreleased mortgages.

These issues are more common than most people realize. In fact, problems with a property’s chain of title can surface decades after a transaction closes. This reality is precisely why title insurance exists.

Title companies also coordinate with municipalities to ensure that required documents are filed in the right places. For example, you must file a property transfer affidavit with the local city office rather than the county recording office. These procedural steps matter because minor filing errors can create massive legal complications down the road.

Title Insurance: Owner’s Policy vs. Lender’s Policy

There are two primary types of title insurance policies in a real estate transaction:

• Lender’s Policy: This policy protects the mortgage lender against title claims. Most financial lenders require this policy as a mandatory condition of financing.

• Owner’s Policy: This policy protects the buyer. An owner’s policy matches the purchase price of the property. It covers the new owner against claims or lawsuits involving prior ownership disputes, undiscovered liens, or errors in the public record.

Additionally, title insurance protects against past events rather than future ones. This distinction matters. If someone with a legitimate claim to the property comes forward after you close, your owner’s policy stands between you and a serious legal battle.

However, a title insurance policy will only protect against what it explicitly covers. For this reason, understanding the exceptions and exclusions in your policy is equally important. You can review the most common title problems in Michigan at the Soble Law title insurance resource: Top 10 Title Insurance Reasons.

What Does a Real Estate Attorney Do?

A real estate attorney is a licensed legal professional trained to give legal advice on matters involving real property. Whereas a title agent can process documents and issue insurance, an attorney can interpret the law, advise you on your rights, and represent you if a legal dispute arises.

This distinction is critical. Title companies and title agents are not authorized to practice law. They cannot tell you which legal option fits your situation best, and they cannot represent you in court or in a legal negotiation. For that reason, having an attorney involved in your transaction adds a layer of protection that a title company simply cannot provide.

Legal Advice That Title Agents Cannot Give

Buyers and sellers often walk into closings with unresolved legal questions that a title agent cannot answer. Consider a few common examples:

• Restrictive Covenants: A seller has a deed with a restrictive covenant that limits how the property can be used. Is that covenant still enforceable? Has it been waived or abandoned over time? Only a real estate attorney can give you a reliable legal answer.

• Clouded Titles: What happens when a title to a property is clouded? A title agent can flag the uncertainty, but they cannot advise you on how to resolve it. They cannot tell you whether to file a quiet title action or negotiate with a claimant.

• Escrow Holdbacks: If an escrow holdback is part of your closing, what are the legal rights of each party if the funds are not released on time?

These questions require careful legal analysis. Realtors, buyers, sellers, and lenders all benefit from working with an attorney who can review the purchase agreement and explain the legal implications of every provision. For more on purchase agreements, visit the Soble Law Purchase Agreements Resource.

How Attorneys Protect Buyers, Sellers, and Lenders

A real estate attorney reviews the sale agreement and flags terms that could expose you to future legal liability. They answer questions about the contract, the negotiations, and how specific provisions might affect your legal rights going forward.

Critically, attorneys are the only professionals who can give a legal opinion on how a party should hold title to a property. Should you take title as an individual, as joint tenants with rights of survivorship, or as tenants in common? Each option has vastly different legal and financial consequences. A title agent cannot advise you on that question, but an attorney can.

Attorneys also review title commitments and identify any exceptions or exclusions that may limit your coverage. They help you determine what is an acceptable exception to a title policy and what is a red flag that warrants further investigation. For more detail on deeds and how title is conveyed in Michigan, visit the Deeds and Conveyances Guide.

Real Estate Attorney vs. Title Company: Key Differences

Understanding the real estate attorney vs. title company distinction ultimately comes down to one fundamental boundary: legal advice.

A title company excels at its core duties. It conducts title searches, resolves minor title defects, issues title insurance, manages escrow, coordinates document filing, and facilitates closings. However, it is not a law firm. It cannot provide legal advice, represent you in a dispute, or give you an opinion on the legal consequences of a document you are about to sign.

A real estate attorney can do all of those things. Furthermore, many real estate attorneys are authorized to act as closing agents and can issue title insurance on behalf of an approved underwriter. This means that, in many cases, an attorney can handle both the legal work and the title work for a transaction. This creates a single point of contact for the entire closing process.

The cost difference is often smaller than people expect. Because title insurance rates are generally set by the market and underwriting requirements, the cost of a title policy issued through an attorney is frequently comparable to the cost of a policy issued through a title company. Therefore, the added benefit of legal protection can come at little or no additional expense.

When Do You Need a Real Estate Attorney Instead of a Title Company?

There are certain situations where relying on a title company alone is simply not enough. Based on our experience at Soble Law, specific property issues require an attorney’s direct involvement.

Resolving Title Disputes and Deed Restrictions

• Clouded Title or Competing Claims: If there is any question about who has the legal right to the property, a title company cannot resolve the underlying legal dispute. A quiet title action is a legal proceeding, and it requires an attorney. Learn more at Quiet Title Actions Information.

• Restrictive Covenants and Deed Restrictions: If the deed contains covenants that restrict how the property can be used, only an attorney can tell you whether those restrictions remain enforceable.

• Errors in Prior Deeds: If a prior deed contains a legal description error, a misspelling, or a mistake in how the parties are identified, an attorney may need to prepare a corrective deed or seek court intervention. You can read more about deed errors at Deed Errors Resource.

Managing Complex Transactions and Seller Financing

• For Sale By Owner (FSBO) Transactions: When buyers and sellers work without real estate agents, the risk of errors in the purchase agreement increases significantly. An attorney can draft or review the purchase agreement, protect your legal rights, and make sure the transaction is structured correctly. Visit: For Sale By Owner Resource.

• Complex Ownership Structures: If you take title in the name of a trust, a business entity, or multiple parties with different ownership interests, an attorney can advise you on the proper way to structure the transfer.

• Land Contract Transactions: In Michigan, land contract sales are a common form of seller financing. These transactions have specific legal requirements and risks for both buyers and sellers. An attorney can draft or review the land contract and advise both parties on their rights. For more information, visit the Land Contract Law Guide.

Can a Real Estate Attorney Also Handle Title Work?

Yes. In Michigan, a licensed real estate attorney can serve as a closing agent and can issue title insurance policies on behalf of approved title insurance underwriters. This means an attorney can conduct the title search, coordinate the closing, handle the exchange of funds, file the documents with the county recording office, and issue the title policy.

In addition to all of that, the attorney provides legal advice throughout the entire process.

For buyers and sellers who want a single professional to manage both the legal and the title aspects of a transaction, working with an experienced real estate attorney is often the most efficient approach. It also ensures that if a legal issue surfaces during the title search or the closing process, the same professional who identified the issue is also qualified to resolve it.

Do You Need Both a Title Company and a Real Estate Attorney?

In some transactions, buyers and sellers work with a title company to handle the closing and separately retain a real estate attorney to review the purchase agreement. This arrangement is entirely reasonable, particularly in straightforward residential transactions.

However, in more complex situations, it is advisable to involve a real estate attorney from the very beginning. This includes cases involving competing claims, unique ownership structures, land contracts, or FSBO transactions. An attorney who is engaged early can review the purchase agreement, identify legal issues before they become problems, and help ensure a clean closing.

Remember this: obtaining title insurance is not optional if you are financing a property purchase. Getting a real estate attorney is optional, but it should be a mandatory consideration on your list whenever you are buying or selling real property in Michigan. The cost of preventing a legal problem is almost always far less than the cost of resolving one after the fact.

For questions about your specific situation, the Soble Law Michigan real estate team is ready to help. Visit our primary platform at Proven Resource Real Estate Law.

Frequently Asked Questions

What is the main difference between a real estate attorney and a title company? A title company conducts title searches, issues title insurance, and facilitates the closing process. A real estate attorney can do many of the same things but is additionally authorized to provide legal advice, draft and review legal documents, and represent you if a dispute arises. The key distinction is that title agents are not licensed to practice law.

Do I need a real estate attorney if I already have a title company? Not always, but in many situations it is wise to have both. A title company handles the administrative and insurance side of the transaction. An attorney handles the legal side, including reviewing the purchase agreement, advising on how to hold title, and addressing any legal problems that surface during the title search or closing process.

Is title insurance required in Michigan? Title insurance is not required by Michigan law, but most mortgage lenders require a lender’s title insurance policy as a condition of financing. An owner’s title insurance policy, which protects the buyer, is optional but strongly advisable. Without it, you bear the legal and financial risk of any undiscovered claims against the property.

Can a real estate attorney issue title insurance? Yes. In Michigan, a licensed real estate attorney whom a title insurance underwriter approves as a closing agent can issue title insurance policies. This means an attorney can handle both the legal work and the title work for a transaction.

What is a clouded title, and why does it matter? A clouded title refers to a situation where there is some question, dispute, or defect in the property’s ownership history that casts doubt on the seller’s legal right to transfer the property. Common causes include unresolved liens, errors in prior deeds, claims by heirs, or competing interests from prior owners. A clouded title can prevent a sale from closing and may require a quiet title action to resolve.

What questions can only a real estate attorney answer? Only a real estate attorney can give you legal advice on questions such as: Which restrictive covenants in a deed are enforceable? How should you hold title to maximize your legal and financial protection? What are your legal rights if an escrow holdback is disputed? What options do you have when a title is clouded? These questions require a licensed attorney, not a title agent.

What does it cost to hire a real estate attorney vs. a title company? Closing costs vary depending on the transaction, but the cost of using a real estate attorney for closing is often comparable to the cost of using a title company. In many cases, the added legal protection justifies any marginal cost difference. Consulting with an attorney early can also prevent far more expensive problems from arising after the closing.

Soble Law helps clients identify where real estate and business deals break down, define the legal risk, and take control of the next step.

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About David Soble: David is a seasoned real estate and finance attorney with more than 35 years of experience, combining his background as a “big bank insider” with a commitment to demystifying complex legal issues for his clients. As the founding attorney of Soble Law (Soble PLC), he leads a specialized team in Michigan and Ohio that handles real estate transactions, contract disputes, probate, and financial litigation. Known for a practical, no-nonsense approach and peer-rated excellence (Martindale-Hubbell AV Preeminent), Soble and his team strive to protect clients’ property and financial interests with clarity, integrity, and experience.

Disclaimer: The information in this article is for general educational purposes only and does not constitute formal legal, financial, tax, real estate, finance, probate, or any other professional service or advice. Reading this content or contacting us does not establish an attorney-client relationship. Every situation is unique, and laws change frequently, so you should always consult with your own qualified attorney or professional advisor before making any decisions.