First deal: Estimated Closing Statement from title company (FSBO/all cash): 13% of purchase price. Is this right?

Question

Nine days after opening escrow, I received an estimate (actually the Buyer's Estimated Closing Statement) from our title company yesterday. It was emailed to me same morning the fedex package to the Seller went out. I had been requesting an estimate since the day we opened escrow.

This is for a 14k property, FSBO, all cash. No clouds on the title. I (the buyer) am paying all closing costs.

Owners Policy $605.00Escrow Fee/ Title Services $1,075.00Transfer Tax $15.40Recording $93.00Tax Proration: $9.70

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TOTAL$1,798.10 (12.84% of the Purchase Price)

Based on subsequent estimates I received over the phone today (I didn't realize that you could get a rough estimate over the phone, as this title company took nine days to provide one), the combined owners policy and escrow fees are $500-$600 higher than other title companies. This is for me, the buyer, paying both sides of fees.

I requested from my title company a fee schedule of the Owners Policy and a fee breakdown of Title Services, and the company has refused to provide. I don't even know what Owner's Policy I'm purchasing. There is a fee schedule posted online, but policy fee in the estimate is 50% higher than posted online.

The Seller has already fedex'ed his forms back.

At this point, what recourse do I have? Are title companies not obligated to provide timely estimates and accurate fee schedules?

Bryan L. · Answer

Jenna Y. - A good Realtor will help their buyer to save money by recommending good providers who also have good prices.  And also a good Realtor will review the HUD-1 settlement statement on behalf of the buyer prior to closing to make sure that there are no mistakes or errors in it, and that the prices are reasonable and what is to be expected.

Unfortunately, many buyers (and sellers) choose their Realtor based on how "hot" or pretty he/she is, or how many times his/her picture is on a billboard around town, or because they do XXXX number of transactions per year or whatever.  And unfortunately for me, I am not hot or pretty and I don't spend money on billboard, and I haven't been around the game long enough to do a huge number of transactions per year.  I'm just an old fat guy who is losing his hair, but I save money for my clients.

Wayne Brooks · Answer

Here, anyway, the title insurance costs are state mandated.  On such a low price, you can't look at the closing costs as a percentage though.  It may to be that far off since you're paying Both sides.  Any transfer fees/taxes there?

Account Closed · Answer

Be careful how you report them because they can burn you big time and then no one will work with you.

Joe Gore

Jenna Y. · Answer

Thank you all. I learned a lot from this. I thought title/escrow was a fairly straightforward offering - but realizing that pricing, quality and professionalism vary wildly, even from one regional office to the next. Also, I'm picking up that realtors usually act as the middleman and realtors have little/no incentive to question things as long as paperwork gets done - and the buyers trust that realtors are looking out for their best interest. As a result, there is little oversight/accountability in the title/escrow industry it seems. Interesting world.

An update: I contacted another regional office from the same parent company. They quoted $500 less and openly disclosed fee structure and schedule immediately over the phone (the office I worked with refuses to disclose a fee structure or schedule, and took nine days to provide an estimate). So for the office I'm working with, something is not right. I'm not sure if the lack of fee transparency  is intentional or simply due to mismanagement/incompetence.

Unfortunately, too far into the closing process to do anything at this point, so I'm going to finish off it, report the incident with documentation to their corporate offices, and move on from this rabbit hole. Luckily, not too expensive of a mistake and in the process I found a much more reliable escrow company to do business with going forward. Onward upward.

Dion DePaoli · Answer

Promulgated rate - is the state mandated minimal charge for title insurance and some other title services.  The cost can be no lower but a title company/attorney can charge higher.  This is state specific.Here is a Title Matrix for such things from Stewart to give you an idea of closings and fees per state.

Bryan L. · Answer

@John M.

- I'm working with a buyer right now as their Realtor, and they are buying in the 100K range.  Owner's title policy is in the $450 range.  Search should be about $250 I think.

John M. · Answer

@Bryan L., I had to pay $824 a few days ago for an owner's title insurance policy on a $100k house in Knoxville. It did come with three adjoining lots with separate chains of title, but I'm not sure how much that played into the price of the policy. The escrow fee/title services sounds outrageous, though.

Bryan L. · Answer

Those first two line items are much higher than what I would pay in TN, but I guess everything costs more on the left coast.

First deal: Estimated Closing Statement from title company (FSBO/all cash): 13% of purchase price. Is this right?

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