All That Research and Almost Nothing to Show for It

I spent the last few days researching title insurance companies in the state of Maryland and finally decided to proceed with Stewart Title. I found a very pleasant settlement agent to handle all of our paperwork and patted myself on the back for finding a cheaper solution to the title service recommended by our lender.

After reviewing the various costs and running all the numbers I realized we’d save over $280 with the new settlement company. Almost every fee was less expensive including title searches, title insurance, settlement fees and lien releases. The new settlement agent has a few extra charges for wire services and FedEx, but even with those additional fees the total cost was still $280 less! I must admit I was tickled pink with the savings. After all, we’ve refinanced at least three times before and this is the first time I’d ever shopped around for cheaper title insurance.

Unfortunately, my excitement didn’t last long. I found out that our lender plans to charge us $200 to review the title work performed by the other company. Suddenly that $280 in savings dropped down to $80.

The last few days feel like a complete waste of time. Here I was trying to be proactive, trying to learn about the process and trying to make more informed decisions. Unfortunately the lender still wants a piece of our pie. While I understand the bank’s desire to protect it’s investment I cannot believe they plan to hit us with a $200 title review charge.

It seems I spent all this time researching title insurance regulations and contacting agents to save $80. While $80 is certainly not chump change it’s a drop in the bucket of our overall closing costs. Oh the frustration.

3 thoughts on “All That Research and Almost Nothing to Show for It”

  1. Having worked for a short time with a real estate attorney, I can't say that I blame your lender (wow, I actually just defended a lender…typically I think they're horrible). If title isn't properly cleared before you take ownership of your property, you can have major issues when you go to sell, or even have a lien taken against you based on work performed before your purchase. Not all title companies are equal — it's in your best interest to ensure that as many eyes are looking out for you as possible.

  2. While your frustration is understandable, you should not regret making an effort to become an informed consumer, particularly when it comes to title insurance as it is a common but poorly understood financial product. It is regrettable that your lender is effectively incenting you to not exercise your legal right to shop around for title and closing services by levying that fee, but you are ahead of many consumers in understanding that you have that right to shop around. In regard to title insurance, many consumers simply take the advice of their lawyer or realtor as to which title insurance carrier to use, not realizing that the referrer is making 60-90% of the title insurance policy premium as a commission.

    Your research should hopefully have turned up another option to save on title insurance, and that is to buy your policy directly from a title insurance carrier. In Maryland, ENTITLE DIRECT is the only title insurance company that offers title insurance direct to consumers at a 35+% savings, and also offers a transparent, flat fee for settlement services.

  3. See, I'd be frustrated too. But I would also be thinking how glad I was that I saved $280 because at least I came out ahead. If I hadn't done all that research, we'd have been dinged $200 with nothing to offset it.

    I'm not usually much of an optimist, so when I bother it's usually important. On this issue, I insist that you actually saved your own behind in this case.


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