Does it Matter Which Company Provides the Title Insurance for Your Real Estate Transaction?
If you are a New Yorker buying a primary home, a second home or a commercial property, more often than not your attorney will choose the title insurance provider for your transaction.
And truth-be-told, the first time you even hear about title insurance may be at the closing table when you are told to write a check made out to the title company.
If title insurance is considered by many to be a commodity product, no different whether it’s obtained from Company A or Company B, should a buyer take the time and make the effort to get involved in the process?
The reason, as those of us at Hallmark Abstract Service are constantly explaining, is that all title insurance providers are not created equal! And while you rightfully trust your attorney to make the decision having your best interests at heart, consider this…
Five Items To Be Aware Of When It Comes To Title Insurance!
1) Title Bills Will Vary From Firm To Firm – This variation can be as much as $1,000 or more…
When you receive a copy of the title bill for your real estate transaction in New York, the title insurance premium being charged will be the same regardless of the company you choose to use (Note: in a mortgage refinance, make sure you are being charged at the reissue rate if your transaction qualifies for it)!
Many of the other charges that appear on the title bill, however, known as ‘junk’ or ancillary fees, can and will vary from firm-to-firm. Sometimes this variance can be in the many hundreds of dollars and charges that appear on one company’s bill may not appear on another’s (i.e. FedEx).
Hallmark Abstract Service is proud that we charge among the lowest non-premium fees in the industry, feeling that we are well compensated through the percentage of the title insurance premium we receive.
***Remember our recommendation regardless of who is providing the title insurance for your transaction…Get a title bill from at least one other company for comparison purposes.
2) Know (and approve) Who The Title Insurance Underwriter Is! –When you buy insurance, regardless of the type, it’s critical that if a claim is put in that the underwriter will have the financial ability to pay! Remember that the claims-paying ability of companies are not all the same! This is certainly the case with title insurance underwriters. Hallmark Abstract Service uses Fidelity National Title Group, the best capitalized title insurance underwriter in the business.
3) Know The Title Claims Experience Of The Firm Chosen To Provide The Title Insurance Policy! – While at the end of the title insurance process the buyer will be provided a title insurance policy at closing, the work that goes into preparing that policy can be vary from firm to firm. While some of the issues surrounding a property may not be knowable, the number of valid title claims that an agent may have been subject to matters. Don’t be afraid to ask that question. Hallmark Abstract Service is proud that in our 10+ years in business, we have not had a valid title claim!
4) Is There An Affiliated Business Arrangement Between The Title Insurance Provider And Any Of The Other Players In Your Transaction (i.e. attorney or real estate broker)? – Perhaps an uncomfortable question to ask, but you as the the consumer have the right to know and the firms involved have the obligation to tell! An Affiliated Business Arrangement or AfBA, ‘is an arrangement to share or refer business between two different companies involved in providing services in the closing of a real estate transaction. There may be ownership interest of a party in both the business referring out the service and the business receiving the referral. The practice is not illegal, but is regulated by RESPA to assure full disclosure to the consumer of any relationships where business is referred in this way.’ (Source)
You want your title insurance provider to solely be focused on protecting you, their client, and not considering a business arrangement with a third party. Hallmark Abstract Service has no affiliated business arrangements.
5) You As The Consumer Have The Right To Choose The Title Insurance Provider – It’s entirely possible that you may not want to but, be aware, that if you do it is your right to choose!