Saving Money on Title Insurance
If you paying retail for title insurance - you shouldn't be. There is such a thing as “PROMULGATED RATE”. This is a rate for title insurance that is standard for the title companies. Many of them will tell you that they cannot sell you title insurance below this rate. In fact, one company actually told me that by law, he cannot go below that rate.
This is simply not true. What is true is that if you are not the one paying for the title insurance, you can not get the discount (in other words you cannot profit from a discount that should be someone elses – like the seller of the property.)
I closed on a loan last month and my title insurance was quoted at $17,000. This was the promulgated rate. I asked for a discount. I was told that it was illegal. I went elsewhere and found a title company that sold me the same insurance for $10,000.
Ask around for the best rates. Then push for a discount. You should get at least a 30% discount, especially if you do multiple deals.
Gregg
Gregg,
Lets see, I buy a piece of property. I go into escrow, I pay generaly half the escrow costs and The Seller pays the Title Company costs of the policy which is his way of delivering a good title. I as the Buyer, if I am financing the purchase have to buy a Policy to insure the lender up to the amount he is lending. Now there are deductions in fees available on these policies and such deductions are listed in all Fee schedules of title companies operating in Calif. Such fee schedules are listed in the California Rate Schedule. There are no discounts other then these, but sometimes these stipulated discounts are not disclosed to the Buyer and Seller.
As a Broker I never enter an escrow without a copy of the Calif. Rate Schedule and if there are any discounts to be obtained for either Buyer or Seller, I will insure that they are given. Also when you get into fees in excess of $5,000 the schedule is exceeded and you are in the area of bargain. This a Broker does on your behalf.
In the present instant dear Gregg I would kick the poster of your Broker such discounts in those amounts are always given. If you are operating without a broker in a transaction in the high millions where the quote is $17,000 for the title insurance, it being impossible to kick your own poster, perhaps you should ask a friend, it is a most necessary function.
As always your friend Lucius
When I buy a single family residential property for my investment rental portfolio, I pay for title insurance for the lender as well as for myself.
Because the combined premium is only in the $400 range, would the issuer be less reluctant to grant a discount? Am I correct to assume that any discount given really reduces the commission received by the title company or settlement attorney who sells me the policy?
You are correct that any reduction the insurer's agent gives you comes out of his pocket. You would also be correct if you assumed his profit margin is very large. Of course he will be reluctant to give you the discount. He should be as reluctant to give you the discount as you should be to pay the full rate.