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Platinum Regular Contributor
tjh
Posts: 4,741
Registered: ‎01-09-2010
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Owner's Title Policy

I know we've covered this ground before but......

 

When we received an estimate of closing costs at the time our offer was accepted, one of the provisions was that the relo company for the seller insisted on using Old Republic Title.  They had an estimate for a Lender's Title Policy and one for an Owner's Title Policy at about half the Lender's Policy premium.  It was around $1,000 and $500 IIRC (I don't have the papers at work.)

 

Well, working with a loan broker we just received our GFE from the designated lender (Parkside Lending whom I've never heard of, but what else is new).  They have the Lender's policy at $1,994 and the Owner's Policy at $1,499!  I knew that Old Republic was on the high side in general and particularly on the owner's policy by comparative reviews I've looked at.  But $1,500 for an owner's policy on top of $2,000 for a Lender's policy seems a bit extreme to me.

 

I'm seriously thinking of not getting the owner's policy.  That is advice I've received in the past and I made that choice on the last house I bought 30 years ago.

 

Am I crazy? 

Silver Contributor
bld999
Posts: 471
Registered: ‎04-15-2011
0

Re: Owner's Title Policy

So if there is a possible cloud on the title that you don't know about, you are ok running bare of insurance? Am I misunderstanding something?

Gold Super Contributor
Jil
Posts: 3,060
Registered: ‎10-24-2011
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Re: Owner's Title Policy


tjh wrote:

 

I'm seriously thinking of not getting the owner's policy.  Am I crazy? 


Normally, owner's policy is funded by seller. It must be in your contract. By Seller paying owner's policy, it protects them from unknown issues on title (If any) and gives you money back if you are at loss later. 

 

However GFE and Closing statement will show, but final closing statement should give you a credit if the contract says it is paid by seller. 

 

Silver Regular Contributor
Fishmarty
Posts: 681
Registered: ‎08-25-2012
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Re: Owner's Title Policy


Jil wrote:

tjh wrote:

 

I'm seriously thinking of not getting the owner's policy.  Am I crazy? 


Normally, owner's policy is funded by seller. It must be in your contract. By Seller paying owner's policy, it protects them from unknown issues on title (If any) and gives you money back if you are at loss later. 

 


tjh: I thought in Northern California buyer pays owner's policy, am I wrong? Or you mean in contract you specify seller pays for it? But would this shock the seller and go ahead to reject your offer?

Gold Super Contributor
Jil
Posts: 3,060
Registered: ‎10-24-2011
0

Re: Owner's Title Policy

[ Edited ]

Fishmarty wrote:

Jil wrote:

tjh wrote:

 

I'm seriously thinking of not getting the owner's policy.  Am I crazy? 


Normally, owner's policy is funded by seller. It must be in your contract. By Seller paying owner's policy, it protects them from unknown issues on title (If any) and gives you money back if you are at loss later. 

 


tjh: I thought in Northern California buyer pays owner's policy, am I wrong? Or you mean in contract you specify seller pays for it? But would this shock the seller and go ahead to reject your offer?


In my contract, page 4 clause

4-Allocation of Costs =>

C - Title and Escrow =>"Seller pays Owners Title insurance standard in santa clara county"

 

In my recent HUD closing statement it gives this:

 

Home Owner Title Insurance-----$1956 (Debit)

Seller Pay CLTA fee----------------$1956 (Credit).

 

My finance person repeatedly informed me the credit is related to Owner's Title Insurance.

 

 

Super Contributor
PoorOwner
Posts: 213
Registered: ‎10-08-2012
0

Re: Owner's Title Policy

[ Edited ]

for what its worth I just closed it was around

 

$1850 for owner title policy $700k

$800 for lenders title policy $600k

 

not really negotiate, ifs or buts,  part of closing cost.

GFE is really not reliable anyway.

 

Thats very nice seller pays it in Santa Clara county by default..

they pay escrow fees too?  it must be really cheap to close a deal in santa Clara as a buyer

Platinum Regular Contributor
tjh
Posts: 4,741
Registered: ‎01-09-2010
0

Re: Owner's Title Policy

According to what I can find:

 

1) In Solano County the buyer pays for the lenders and owner's policies.  You folks in Santa Clara better kiss someone's posterior.  Of course, in the end, it doesn't really matter who "pays" as such ancillary fees are reflected in the ultimate cost.  I hope no one on here is like my next door neighbor who insisted that buying that car was a better deal because the dealer threw in a "free" bicycle.  Yes, he insists it was completely free.  That's one of the hazards of being an accountant by trade;  you know better than to believe in any free lunch - TANSTAAFL.  :smileysad:

 

2) Looking further through our lender's disclosure documents, I see different figures quoted for the policies in two different places. 

 

The GFE quotes $1,499 for an owner's policy and the lender's policy @ $1,994 is inclusive of both a title policy AND title services

 

Oops!

 

The Itemization of amount finances is in line with my expectations and this comparator for Solano County.  It shows $1,499 for the owner's policy and $574 for the lender's policy.

 

http://clta.titlewizard.com/wizard/results

 

Maybe this is inline with what I should have expected after all.  But, that begs the question of what "title services" we're getting for the $1,413 in title services  ($1,994 - $574 lender's policy).

 

3) We were told at the time we wrote the offer that, we would have no choice of title insurance or escrow company because the relo company that would become involved upon seller's acceptance of our used Old Republic exclusively.  But, in doing a bit of research this morning, I'm seeing that this isn't allowed under RESPA:

 

"Section 9 of RESPA prohibits a seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance."

 

I don't care if the relo company has structured a volume discount deal with Old Republic.  But, if they have, I expect to benefit as well because I'm playing along.  Cheaper title fees perhaps?

 

None of this is a deal breaker.  I just don't want to get hosed by junk fees and kickbacks if I can avoid it.  Once the offer was accepted, it seemed like all of our choices were flying out the window and all the players began circling around like vultures, telling us what we were going to have to pay without our even having time to consider it and shop it around a bit.  This is a big expenditure and I like to take my time.  All of the little stuff adds up to a pretty penny if you don't watch out.  :smileyfrustrated:

Redfin Open Book Certified
LoansbyJW
Posts: 3,207
Registered: ‎04-30-2009
0

Re: Owner's Title Policy

Parkside might have been estimating the costs to close without the benefit of the Settlement Services estimate to close. Lenders are required to send out disclosures within a specific time frame while also accurately quoting some of the third party fees. Becase lenders are liable for any under quoted fees, they will often "hyper quote" fees, knowing that it's easier to start high and end up low than to start low only to be forced to pay the difference in costs as per regulations. The Settlement Services Estimated HUD-1 is much more accurate of a document to use when trying to budget for third party fees the lender has little control over.

 

Thanks for reading,

John Wheaton NMLS 653018 | Redfin Open Book Recommended Lender
See all my reviews
Platinum Regular Contributor
tjh
Posts: 4,741
Registered: ‎01-09-2010
0

Re: Owner's Title Policy

Thanks John.

 

The inconsistencies in the time frames that we've been presented with both verbally and in writing are amazing.  The realtor, the loan broker, the lender and the esrow company are not in synch.

 

It all started with:  "The seller wants to close in 30 days, so you'd best specify that you can in your offer".  It's been a mad dash from there.

 

But hey, I'm not worried because, it's all moving forward.  :smileyhappy: