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Updated about 6 years ago on . Most recent reply

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Shine Guo
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Negotiating Title Insurance and Closing Fees

Shine Guo
Posted

Hello!

I have always been shocked by how expensive title insurance and settlement fees are. As a buyer, has anyone had experience either negotiating with the incumbent Title Insurance company on how much they are charging, or using alternative providers such as Entitle Direct?

On one of my closing statements the title company wanted to charge $2000 in settlement/closing fee, $500 for lender's title policy, and $180 per endorsement. I wonder if it's at all common to negotiate these fees. For example, my sense is that settlement/closing fee should usually be in the $500-750 range (and not scale based on purchase price as it is mostly a fixed cost?).

I have also received an independent quote from Entitle Direct that is much lower ($500 settlement/closing fee, $500 for lender's title policy, $25/endorsement), although the biggest saving is on the owner's title policy ($1000 vs. $3000 from the incumbent Title company above). Unfortunately in my state it is common for the seller to pay for the owner's title policy so I won't be able to capture that saving. While it's still very tempting to be able to save $1500-2000 in settlement and endorsement fees, I wonder if the switching hassle is worth it and whether anyone has experience doing this?

Would appreciate any and all advice. Thank you!

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Chris Mason
  • Lender
  • California
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Chris Mason
  • Lender
  • California
ModeratorReplied

Escrow/title fees are the LEAST shopped service providers in the real estate world, by far. So fees are of course inflated - that sales rep knocking at my door has cleavage for me to look at, but it isn't free cleavage! You the consumer are paying for it, should I elect to use her services for our transaction. And if the person you are working with is female, then there's a chiseled jaw-line for her to look at (realtor if purchase, LO if refi, the "looking hot sells" dynamic is identical, assuming the LO/realtor puts decent production numbers up & is worth them chasing).

Escrow/title companies are also the highest unit count and volume services that you will encounter, again by far. Because they are so high in volume, like an assembly line, it's a waste of your time trying to negotiate with them. They will be perfectly happy to just say "NEXT!" and move on (the male sales rep will do some reps for the biceps, or the female sales rep will get a tighter bra, before they negotiate with you).

You will have better luck price shopping than negotiating. 

But you still get what you pay for. That will never change, no matter what. Timing and reliability is where the cheapo companies will fail you, so don't bother if closing date is time-sensitive. 

Whatever you do, ensure that the folks you choose do NOT outsource ANYTHING to ANY overseas entity. Quickest way to ensure a botched closing is when someone residing in a developing country is responsible for... well... anything. Might as well hire someone that lives in Russia to be your appraiser. 

BRB, sales rep from an escrow company rocking her power cleavage and heels is knocking at my door for my Oakland refi business....

  • Chris Mason
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