How much is title insurance supposed to cost?

Discussion in 'After Hours Lounge (Off Topic)' started by CapnSharpe, May 29, 2003.

  1. CapnSharpe

    CapnSharpe Stunt Coordinator

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    I'm currently buying a new house and received all the paperwork for the mortgage application and title insurance policy today. According to the lender's good faith estimate, the title insurance is supposed to cost $175. When I looked through the paperwork from the title company, the actual price of the policy was $1,262!!

    Naturally I'm calling all parties concerned and (politely) demanding an explanation. With such a huge discrepancy I'm wondering if the explanation I get will be truth. Anybody here in the title insurance business care to shed some light on the costs behind title insurance? [​IMG]
     
  2. Patrick Sun

    Patrick Sun Studio Mogul

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    7 years ago, I paid $125 for mine. I actually wrote out a separate check at my closing for that amount in the lawyer's office.
     
  3. Craig Robertson

    Craig Robertson Supporting Actor

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    if i remember correctly, i paid about $150ish in '96. over a grand something is just plain wrong.
     
  4. Steve_Tk

    Steve_Tk Cinematographer

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    You shouldn't pay more than 200 dollars. But definately look into it and do NOT pass on it. There are stories all the time where there are screw ups in the past and people loose their homes because they do not have title ins.
     
  5. ChuckSn

    ChuckSn Extra

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    I believe title insurance premiums are state regulated. If you are doing a refi and there is a previous copy of title insurance available you should be entitled to a 50% reduction of the new premium. However on a purchase this credit is not available. $1200 does seem a little high unless you are purchasing a home in the $250k+ range.


    Chuck
     
  6. Robert McDonald

    Robert McDonald Stunt Coordinator

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    Title insurance costs are state regulated and depend on the cost of the house and/or the amount of the loan. As a buyer you don't have to get title insurance insuring your ownership interest (i.e., protection in case there is an adverse title matter), but your lender will require title insurance to insure their loan. I don't know where you are located, but in Florida a title insurance premium of $1,262 equates to a policy in the amount of (very roughly as there are other costs and I don't know such other charges are included in the $1,262 or not) $237,400.

    Typically a title search is a separate charge which is usually about $150-200 (the title search is required for the title company to know if there are any title issues)

    Robert (practicing, among other things, real estate law in Florida)
     
  7. Win Joy Jr

    Win Joy Jr Stunt Coordinator

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    That is WAY out of line...

    Also, spend the additional money to get an owners policy as well.
     
  8. Kirk Gunn

    Kirk Gunn Screenwriter

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    What I never understood is.. If you're paying for a title search, why pay for insurance ? To cover the researcher's mistake ? Why am I paying the researcher ? Shouldn't they be the one's buying the insurance ?

    Sounds like the Dilbert Cat-Consultant gone bad: Yeah, I'll perform some work for you, but I'll also have to bill you 10 times the original price to ensure I didn't screw up.
     
  9. CapnSharpe

    CapnSharpe Stunt Coordinator

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    Based on your advice I called the Texas department of insurance. The rates are regulated by the state of Texas and that is the exact rate set by Texas. [​IMG]
     
  10. SteveA

    SteveA Supporting Actor

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  11. MikeAlletto

    MikeAlletto Cinematographer

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    I'm in Texas and closed on a house in february so I went to look at my settlement statement. Title insurance total was $1622. 200 under lenders coverage, 1422 under owners coverage. Fortunately for me this was one of the many things the builder picked up and paid for me.
     
  12. Craig Robertson

    Craig Robertson Supporting Actor

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  13. Marvin

    Marvin Screenwriter

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  14. SteveA

    SteveA Supporting Actor

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  15. Marvin

    Marvin Screenwriter

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  16. Kirk Gunn

    Kirk Gunn Screenwriter

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    Steve - Thanks for your insider comments.

    How frequently are claims made against Title Insurance Policies ? Seems like an ~1% fee is pretty steep considering the infrequency of claims. I have never heard of one, but I may be a little sheltered.

    Are claims more commonplace with commercial real estate where you frequently have multiple owners and complicated lease agreements ?
     
  17. Bill Lucas

    Bill Lucas Supporting Actor

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    Marvin,

    Because you are purchasing the house, not the lender. You are the risk to the lender and the lender will require you to pay to cover their risk. You don't have to purchase title insurance for yourself but you do have to cover the lenders interest. It would be silly not to purchase title insurance as a borrower because the lender would be covered and the borrower could be out of the house. Good and correct information has been given by some knowledgeable people in this thread. What is amazing to me is the group that wants the lender to assume the risk AND to bear the costs.
     
  18. Marvin

    Marvin Screenwriter

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  19. SteveA

    SteveA Supporting Actor

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  20. Marvin

    Marvin Screenwriter

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    OK Steve. Thanks for the explanation.
     

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