Is it just me, or is title insurance on your home way overpriced?

[NewJeffCT]

I was just looking at the breakdown of the title insurance on our new home and it came out to $2,159, which is in line with quotes we got from other attornies regarding title searches & insurance.

However, if you look at the fine print, it says, "title agent commission, 60%"!!!

That means, the attorney who does the title search gets $1,295.40, or 60% of the $2,159, while the actual insurance is $863.60.

Now, I don't dispute the necessity of having title insurance, but that is one fracking huge commission.

[mainegreen]

1. Well, think about the liability he has if he screws up.

Plus dealing with city hall, rifling through drawers, reading all the documents. I'd expect he'd spend at least a few hours doing the title search (one would hope anyways). Sounds reasonable to me.

[NewJeffCT]

4. well, it's a she

but, this attorney has been in business for at least 20 years in this area, and has done a majority of the homes in the subdivision where we are buying.

[mainegreen]

5. -nevermind-

delete.

[AllegroRondo]

2. anything associated with home buying is way overpriced

because so many people dont even look at the line items and just roll the cost of it into their mortgage.

[LostinVA]

3. It's a total scam

[taterguy]

6. Simple solution: Don't buy it

This is the land of the free. You don't have to buy anything you don't want to buy

[flvegan]

8. Good luck finding a lender, then.

If one is taking a mortgage at the time of purchase, you likely don't have a choice. The lender wants their Lender's Policy, too.

[flvegan]

7. Actually, no, it isn't (from someone in the biz)

The "actual insurance" goes to the underwriter. The agent or the attorney that does the search/exam, doc prep, payoffs, problem eradication, etc carries a significant liability. Calling it "commission" really isn't appropriate. Most states have rates that are set to be x premium for the first x thousand dollars, and x premium for each additional x thousand dollars.

Now, do tell how much your insurance coverage is. I didn't check your state (assuming CT), but $2,159 for title insurance sounds like a hefty purchase price.

Also MAKE SURE you keep your Owner's Policy. If you ever go to refinance, you might be able to save a TON of money on closing costs.

I could tell you absolute horror stories about title losses. Trust me, the insurance is well worth it.

[NewJeffCT]

9. Some differences however

1) The attorney charged us a separate fee as part of her attorney charge for handling the close for the title search. Meaning, her $650 fee for handling the closing included $300 for the title search/examination. The commission is totally separate.

2) The house is not cheap, so I am assuming that the since rates we found were fairly consistent means there is some sort of rate schedule. However, I didn't realize that the attorney gets such a bit piece of the sale of the title insurance

and, I never said I was not going to get title insurance. It just seems like a rip-off to pay a 60% commission rate. Seems like a potentially good business opportunity if you can undercut that rate structure (assuming you can do that legally)

[CharmCity]

10. So, did you sell your old house?

I remember you were having a problem...

[NewJeffCT]

11. nope

luckily, we have good credit and pretty good incomes, so were approved for a bridge loan to finance the remainder of the down payment on our new home.

However, we're even luckier that my parents are good savers, so they have loaned us the cash (temporarily of course) instead of having us go through the process of the bridge loan, and have to pay that each month until the old house is sold.

[NewJeffCT]

12. and, what I should say is...

after the attorney does the title search, could we have gotten title insurance on our own and saved ourselves $1,200 or so?

[flvegan]

13. No.

The search/exam is guaranteed by the underwriter for the searcher/examiner.

Title insurance isn't like casualty insurance. It's very, very different.

[NewJeffCT]

14. I understand that things are different

However, the cost breakout has two charges to us, one for the title search/exam, which is paid to our attorney (I think that was $300 or $350). The other for the title insurance itself. The breakdown of the actual title insurance charge includes two items: $863.60 for the actual title insurance and $1,295.40 for Title Agent Commission to our attorney, for a title insurance charge of $2,159.

If the insurance underwriter is guaranteeing it for the attorney who did the title search, shouldn't it be listed as something like a "title insurance guarantee fee" instead of title agent commission, which sounds like our attorney sold us the policy, not that the underwriter is guaranteeing it for the attorney.