Each title company has their own set of fees. Some charge one flat fee. Others add a couple junk fees. Some pile on a stack of fees that may add up to an extra $300 to $700.
The ones who charge multiple fees say, “We like to break it down for the buyer, so you know where everything goes.”
That sounds fine, but when the total of the break-down is significantly more than the flat-fee company, something is fishy.
And, there shouldn’t be double-charges. Such as a messenger fee and an overnight fee. Both of those fees are to transport the signed docs back to the lender. Which are you using, a messenger or FedEx overnight? And why are you charging $75 when Fedex overnight by 10:30 am (2 lbs) is $28.05? 3 lbs is $31.40.
Can You Object to Title Overcharges and Junk Fees?
You can always object to title fees, but if you’re far into the loan process or almost at closing, you have no leverage and will likely have no success. They will say no, and then what? It’s too late to start over with another title company.
The best solution is to know from the start which title company you want to use. That way, you write it in on your purchase offer.
The Law and the Seller
Federal lending law states that the choice of title company belongs to the Buyer. However, when a listing agent places the home on the Multiple Listing Service, he/she includes the legal description of the property, and they get that from the title company. Thus, the listing agent chooses a title company right from the start.
No actual work has yet been done by that title company, so at this point, it is no problem to switch companies. There is no reason you can’t say, “I’d like to use Y Title,” even though the listing shows X Title. Truly, it’s no problem.
How Do You Find Title Company Fees?
Use Google to search for your title company + zip code. Some companies have a fee calculator on their site you can use. For the others, call and ask. You don’t need a written quote. The title agent can provide the quote over the phone in just a few minutes.
Personally, I prefer to use the same company for both title and escrow settlement. This is because (1) many offer a 10 percent discount for doing so, (2) you avoid the sub-escrow fee, (3) avoid expensive little independent escrow companies–which in California can be double what the national title-and-escrow companies charge, and (4) possibly save time at closing.
If you are in a state where an attorney is used for settlement closing, then the above doesn’t apply to you. But do take the trouble to find a good and reasonably priced attorney.
When Good Folks Ask Me About their Closing Costs
I appreciate where people are coming from when they email me a list of their closing costs and ask, “Am I getting ripped off?” However, I cannot answer this question without seeing the actual Closing Disclosure. I don’t know the price of the home, their state and zip code (which affects the title cost), or what fees they might not have noticed hiding in a different section, or if the seller or lender are providing a credit. When I do a review, I spend time ahead of our consultation comparing local title fees for their exact situation, and this takes time out of my day. This is why I charge for my service. It’s not that I’m trying to be greedy, but a review-and-consult takes a good hour. If I do that for four people, that’s four hours of my day, so you get the idea.
I encourage you to do your research ahead of shopping for a house. That way, you will be empowered with knowledge and make a good choice for a title company right from the start.
Some Realtors say not to “rock the boat” and let the Seller choose the title company. In a super-competitive market where multiple offers are coming in, there’s some wisdom in that. If you’re bidding $25,000 over asking price, why worry about paying an extra $500 or even $1,000 for title? Your objective is to beat out five other buyers and get the house.
Thank you for reading. Remember, I am state licensed in California and Washington. (NMLS 1284134) I am a mortgage broker, so I am legally bound to find you the lowest interest rate, best pricing, and best loan program I have from my list of 50+ wholesale lenders. ApplyHere