YOU have the RIGHT to choose your own Title Company!
Federal law guarantees you the right to choose the title company that will handle your real estate transaction-whether it is a cash sale, purchase/sale with a new mortgage or a refinance.
As this will probably be one of the most important financial transactions of your life, you should carefully research who you will be entrusting with your money and the ownership of your home. Depending on the price of your home and/or the size of your loan, you will probably be paying $500.00 to $2,500.00 for title and closing services; would you make any other purchase that size without shopping around?
By all means listen to your real estate agent or lender, but call around, ask questions and get comfortable with the people who are going to handle what is probably the biggest financial transaction of your life! The more information you have, the more control you’ll have over the outcome. It’s your choice!
Closing a real estate transaction and solving title problems often requires fairly sophisticated interpersonal and legal skills. You need a title company that is experienced, competent and familiar with local custom and practice. An established local agency – with attorneys and underwriting staff available in their office – probably is your best bet to insure a smooth closing.
The following is information you may want to know as you go about selecting a title company and how title and closing services are Sold/Performed.
Who Pays and Who Chooses?
Title insurance and closing fees are one-time costs on the transaction. In Texas, tradition is that the seller pays for the Owner’s Policy which insures the purchaser, and the purchaser pays for the Lender’s Policy that insures the lender for the mortgage. The seller has traditionally selected the title and closing agent because they need to show their ownership of the Property. The other reason the seller has traditionally chosen the title company is that at the end of the closing virtually all of the money that is on deposit with the closing agent belongs to the Seller, either in proceeds, payoffs of existing mortgages or payments such as Brokerage Commissions and Transfer Taxes that are obligations of the Seller. They want to be confident that the escrow agent holding their money is a company they can trust.
Pricing and Closing Costs
In Texas, both underwriters and agents are obligated to charge title insurance rates that have been filed and approved by the Texas Department of Insurance. This is the entity that regulates the Texas industry. In addition to title insurance, title companies charge closing fees. Closing fees are the fees associated with creating the settlement statements, managing the loan documentation, paying off liens, commissions, and other “costs” incurred to get to settlement. They also include fees to make sure that deeds and mortgages are recorded timely and correctly. These fees are not regulated and vary from company to company, county to county and state to state. These fees are sometimes “all inclusive”, with one fee covering everything that the title company does-preparation of closing document, conducting the closing, as well as expenses such as overnight fees, wire fees, fees charged by municipalities etc. Other firms often charge for each item individually. Ask and get quotes and compare them, especially if your lender has provided you with a “Good Faith Estimate or “GFE”. Beware, however of lenders that do not charge “closing fees” or who have “zero cost” loans who try to steer you to title companies where they have a financial stake – the fees could be buried in a higher interest rate. The money is still collected and internally transferred to their title agency. You may want to compare the “no cost” loan to another company that offers a rate plus “fees” to be certain you are getting a good deal.