If you have already been shopping for a real estate agent, a lender, a home and a moving company, you may be feeling shopped out. Before you put your feet up and relax, you should take the time to shop for title and closing services. Choosing the right title or escrow company can ensure a smooth settlement day, and it can save you money whether you are buying a home or refinancing your mortgage.
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Local regulations typically mean title insurance premiums are nearly the same from one company to another, but prices often vary for settlement fees. A February 2011 survey commissioned by Federal Title & Escrow Co. in Washington, D.C., showed homebuyers could save as much as $1,180 by shopping for title services.
Kathy Kontos, owner of Cosmos Title Agency LLC, in Woodbridge, N.J., says competitors' prices in her area are similar for a title search, title insurance and closing services, but she says consumers should still get recommendations from their agent and lender and call several title companies to compare their prices and services.
"If you are refinancing, before you shop for title services you will need to know your new loan amount, the prior loan amount and how many people are on the deed in order to compare prices," Kontos says.
Homeowners who are refinancing may qualify for a reissue rate on their title insurance. Joseph Gentile, vice president of Federal Title & Escrow Co., in Washington, D.C., says refinancers can save as much as 40% of the premium in his market. Savings might be more or less than that in other markets.
"Buyers can request a copy of the title insurance policy from the home seller and contact the title insurance company to see if they are eligible for a reissue rate," Gentile says.
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Title insurance rates and title search fees are not negotiable in some areas. However, prices vary for closing services and are negotiable, so consumers can comparison shop for these services. Many title and escrow companies post their fees online.
"Some companies charge separately for the title search and document fees, but others, like our company, charge a flat fee for all services," Gentile says. "It's important for consumers to get a written, guaranteed quote so that there are no surprises at settlement. Title companies that are transparent will give you a quote online so you can compare fees easily."
Laurie Misner, a certified escrow officer and manager of College Escrow Inc., in Claremont, Calif., says reputable escrow companies with nothing to hide will post their fees online, making it easier for consumers to see competitive rates.
Shopping for Quality
"Consumers should check to make sure they are working with a solid, trustworthy company," Misner says. "You should get recommendations from the people you already trust like your lender and your Realtor, and then follow up by checking that they are in good standing with their state licensing commission. You can look on their website to check for certifications. In California, a certification from the California Escrow Association means the escrow officer is up-to-date with all local laws, has taken continuing education classes and is serious about providing the best possible service."
Kontos says consumers should call two or three escrow companies to make sure the consumer feels comfortable with the escrow officers.
"You can ask about closing fees and also ask for the details about where the closing will take place and what to expect," says Kontos. "Make sure you know whether holding the closing at a location other than title company office or during nonbusiness hours will cost you an extra fee."
Gentile recommends checking with the Better Business Bureau as well as the state title insurance administration for a license.
"It's important to find out how many years of experience the staff has and whether they are local because title regulations are very specialized," says Gentile. "You can also do a Google search to check on the history of a local company."
Gentile says some title companies are affiliated with a particular real estate brokerage, so he suggests asking for recommendations that include at least one company that is not affiliated with the brokerage to compare prices and services.