When you bought your home, did you choose the title agency to handle the title transfer?
More often than not, your realtor or sometimes the loan officer may suggest a company for you. You may wonder why does it even matter? It is against federal law for a service provider to insist that you must use their title company. It is always the buyer’s choice. Here are some things to consider.
Pennsylvania is one of the few States where the title rate is all-inclusive. That means when you pay the premium it includes the cost of the search, title examination, escrowing the funds, conducting the settlement, issuing the title policies (lender’s policy and owner’s policy), and record the documents. In PA there are 17 title insurance companies that are members of TIRBOP. These title underwriters file their rates all the same with the PA Department of Insurance. The cost for the premium is based on the coverage amount. Title agents are licensed and are contracted with a title underwriter to issue their policies. Some agents are contracted with more than one underwriter.
If the cost of the premium is the same, then why does the cost differ between agencies?
Title agencies usually will have a menu of extra charges like bank/wire fees, notary fees, printing fees, tax certification fees, courier fees, settlement fee outside the office or after hours, and so on. Ask the agent for a title quote of all their fees.
Should I choose an independent agent or an affiliated company?
Many real estate offices have a title agency in their office. The broker may own or have an ownership interest in the agency. Some brokers even sell ownership shares to their agents. The hope is that the real estate agent will refer the consumer to the in-house company. The real estate agent must disclose to the consumer any business affiliations with the title agency. An independent agent will probably get referrals through word of mouth, or by networking and marketing.
Should cost be the deciding factor when choosing a title agency?
The owner’s policy will ensure ownership as long as the owner or their heirs own the real estate. The hope is that you will never have to use the policy. The standard in the industry is to search the chain of title back 60 years. Some agents buy the search or production as it is called from the underwriter. Some underwriters may not go back as far when considering the cost of labor versus the cost of paying a claim. When you buy title insurance, you are also buying title assurance. Ask if the chain of title was examined back 60 years.
What is a title commitment?
The title commitment is the company’s promise to issue the title policy after settlement. It contains the same terms, conditions, and exclusions that will be in the actual insurance policy. It will show the parties to be insured, the vested owners, any liens, requirements, and exceptions. The lender will need this early in the transaction to do their part. It is best for you and your realtor to go over it with the title agent.
What other questions should I ask the title agent?
Do they have a presence in your area? Larger title agencies may service many states. Make sure they know the intricacies of the areas that they service. Do they have full-time employees to conduct the settlement or will they hire a notary to collect signatures? Are they able to handle last minute changes at the settlement table? Do they have the ability to reprint checks or even hand them out at settlement? An out of area agency may not be able to meet the challenges at the settlement table. Do an internet search on the title agency and make sure they have good customer reviews.
You have heard it many times, “buying a home is likely the largest purchase you will ever make.” You received recommendations for the best realtor. You shopped for the best lender. You did your research on where you want to live, and your offer on your dream home was accepted. Choosing a reputable title agent can be just as important. If you shop for title insurance, you can find the best value and save hundreds of dollars too. Remember, it is always the buyer’s choice.