really high title insurance quote
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Anonymous
| I just got quoted *5k* for title insurance (lender's and owners) on a mortgage application in DC for a house with a purchase price of around 700k. This seems extremely high to me. Is it? |
Anonymous
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way high. it's called junk fees and you need to get them out of your price quote.
by any chance did your realtor recommend this Title company? or your lender? get the behind-the-scenes kickbacks out of the deal too. it's supposed to be formulaic, ask for the breakdown. 1.35% of Purchase price from each the DC seller and the DC buyer? plus some minor stuff, right? keepagentshonest.com might have some info I recall from a PP. |
Anonymous
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DC regulates title insurance rates, so all of the companies should be the same. $5K sounds about right for $700K purchase. You might be able to get a discount if you ask.
Also, the transfer and recordation tax are 1.45% to the City for each. Usually the buyer and seller each pay one, but the terms of the contract dictate otherwise, sometimes the buyer gets stuck with both. I hope your agent read the contract. Again, these are fees payable to the City, not the title company. |
Anonymous
| Yeah, the 5k is just for the title insurance, not the recordation & transfer taxes. I've been searching online for DC title insurance rates but can't find them. Any hints? |
Anonymous
| Is it an "enhanced" policy? Some are selling those as defaults. They're padded with unnecessary things. |
Anonymous
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First of all, title insurance is not a "junk fee."
The "enhanced" policy protects your downpayment and equity. The required policy only protects the lender's interest. Title insurance is expensive in DC because there are an inordinate amount of title claims - I've heard 1 in 50. |
Anonymous
| The dirty little secret about title insurance is that owners title insurance is always optional but never disclosed to you. Weve been through circa 5 or 6 closings and always had it removed from the closing statement. If dc really has 1 in 50 title claims, it may be a justifiable expense for you though. Lenders title insurance is never optional. |
Anonymous
What kind of idiot are you? Seriously, having been through one incident I can tell you title insurance is worth it. It's a miniscule amount of money relative to the purchase price of the home. The fact that your lender REQUIRES it is a pretty big tipoff of its importance. That said, don't buy more insurance than you need. |
Anonymous
| I guess im an idiot who has saved about 10k in that same period. If something does come up ill usu that money to cover the lawyer. Anyway its funny title companies want to charge people owners title insurance on a refi when in most cases people already paid for it when they first bought. Now thats a total waste. |
Anonymous
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The "I'll use money to get a lawyer" doesn't necessarily work. First, it will probably be more expensive. Second, they might not be able to fix it.
Basically, title insurance is an indemnity policy that creates marketable title. There are things that you aren't contemplating. If something does come up, the title insurance is on the hook for a payout or lawyer fees. They have to make it go away. And because it is insured, they act fast -- they don't like paying lawyer fees either. Want to wait around for years of legal battles or move on with your life? My dad recently had a $75K payout. They missed a water/sewer line that crossed the property. It exists for a reason. Every closing is a ticking time bomb. And you'll never know until you go to sell the place. |
Anonymous
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And title companies don't charge for an Owner's policy on a refi -- only a new lender's policy. New money, new policy.
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Anonymous
How far do you think your $10K will go defending a title claim? One week? Two? |
Anonymous
It's not just a title claim, i.e., someone showing up saying they own your property. It's also, as a pp said, something that comes up when you try to sell your property that affects its marketability. Say, for example, you want to sell your house for $500,000 because that's what the comps say the value is. So, you go to market at $500,000 and get an offer. The buyers' settlement attorney is better than the one YOU used when you bought your house 10 years ago and discovers a sewer easement running under the house. Now the buyer is saying they will walk away from the deal unless you sell for $400,000. Either you sell or now you have to disclose the easement and the house is worth only $400,000... You make a claim on your title insurance for the other $100,000. Don't think this doesn't happen? It does. A lot. At my closing, days before I was shown a lot that had 11,000 square feet. The listing showed 8,500 square feet. Was I getting a deal, i.e., a larger lot? At least I noticed the discrepency and flagged it to the settlement attorney, who did additional research and discovered the county had taken 3,000 square feet and change 25 years ago to widen a road and construct sidewalks. This doesn't pertain so much to title insurance itself (unless the sellers had based their price on thinking the lot was 11,000 square feet and I subsequently discovered it was only 8,500). But it does show how EASILY mistakes can get made on title work. So, yeah, it's pretty cheap insurance, and you a freaking idiot if you don't buy it. |
Anonymous
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The reason you don't hear much about title claims is b/c 98% of people buy it and it is covered. Some states make it mandatory. It is just risk spreading, like Hazard Insurance, Health Insurance, Car Insurance, etc. And they only insure the risk of the unknown. If there is a known defect, they won't insure it.
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Anonymous
Are you sure the $5K is just for the Owner's Title Policy? We are closing soon on a $900K house. We are paying $2,200 for our Owner's Title Policy, for our own coverage. We are ALSO paying $2,377 for our Lender's Title Policy and the title company's services to process the recordation of their mortgage, etc. Altogether, the sum for both policies and the related services is $4,577, but that is for all the title services (processing the settlement, obtaining sigs, recording, etc.), and issuance of the 2 policies, it's not just for our Owner's Policy. FWIW, we could have gone w/ a cheaper company and saved about $500, total, but it was not worth it to us b/c we trust our title company and settlement agent, and don't want to skimp at the risk of a glitch. |