Sunday, December 2, 2007

Title company fees

Today's Seattle Times/P-I Real Estate section carries a story by syndicated columnist Kenneth Harnery concerning the problem of title company kickbacks. This is another instance of an issue that is different in Washington State than in many other states.

While it never hurts to shop around for the lowest fees, title fees are closely regulated and limited by Washington State law, so you are not likely to find much of a difference between companies. The article fails to mention this because the author is writing for a generalized, national audience.

Even so, there are many other fees associated with a real estate purchase that can and do vary significantly depending upon which company you choose. Two such examples are escrow companies and lenders.

Traditionally, the seller in a transaction chooses the title company because it's a wise practice for their agent to "open title" at the time the property is listed. The buyer usually chooses the escrow company because they often deposit their earnest money with that company (although they may deposit it with their real estate agent's firm. In either case, the money must, by law, be deposited in a special bank account within one business day of receipt). It is not unusual for a seller to request that the potential buyer use the seller's choice of both title and escrow companies, especially if the seller is a developer selling new construction. Some developers steer their business to designated companies who agree to charge them lower fees, thereby reducing the developer's costs and increasing their profit. Nevertheless, the buyer can choose not to honor that request. If it is a seller's market at the time the offer is made (i.e. there may be multiple offers), it may be in the buyer's best interest to capitulate as a way of giving themselves an edge over other buyers.

My clients often depend upon me to advise them regarding which companies to use for title, escrow, etc. They rightfully expect that they can trust me to look out for their best interests in these and all other matters related to the transaction. I work hard to earn and keep that trust.

It is my practice to give my clients the names of at least three alternative providers for any service they request, whether it is for an inspection, title, escrow, lender or other service company. I base my recommendations not only on fees, but on my confidence and knowledge that they will do the job properly. Furthermore, I tell my clients what each provider has done to earn my recommendation.

What do you think? Do you trust your agent to sprun kickbacks?

1 comment:

Settlement said...

Sad to admit but I think there are some of title company who were abusing their expertise. As what they've said their is a big money here that's why its the most crucial part of escrow process