Some new potential home buyers may only familiarize themselves with the asking price of a real estate listing. But one often overlooked expense is how title insurance is going to cost them.
Most states require title insurance, and it ensures that the correct ownership of the house takes place. No one wants to know that the home that they purchased isn’t legally theirs.
Because of the close relationship between a title company and a real estate agent or brokerage, many agents suggest a service for their buyer. But just because they offer a suggestion doesn’t mean that you must take it.
There are several ways that you can cut your title insurance costs. And for even more ways to save, be sure to sign up here with Homes for Heroes to speak with a qualified affiliate agent in your area.
Price Shop Around
As is the case in most businesses, there are more choices than you may initially think. In particularly active markets, you may discover a ton of title companies that you hadn’t even considered contacting.
You should also feel confident enough to attempt to negotiate their pricing. Many areas allow title insurers to name whichever fees they want, allowing some wiggle room.
A more straightforward way to save time price shopping is to use an online search. The American Land Title Association, the national trade association of title insurance, can list all the available firms in your community.
You can also meet with a professional with knowledge about the real estate industry, such as an attorney. But make sure you aren’t violating the terms of your real estate brokerage and know that most legal services get charged at a premium.
Before you wind up spending a ton while trying to save, make sure you’re going about it the proper way. There’s no need to just hand more money over to another invested party. Our affiliates are well versed in all things real estate. Be sure to sign up to speak with a professional in your area.
Shave Off Additional Costs
The title industry is like any other; in some states, they have more freedom to set pricing than others. In areas where the state mostly tells them what their premiums are, they’ll likely make up the difference in additional costs and fees.
While title premiums often get set in stone, the extra items may pose some room for negotiation. Consider looking for what is getting charged for searching fees, courier costs, and office expenses, like copying services.
If you’re nervous about calling them regarding these expenses, you can relax knowing you have the upper hand. The risk of having no other title service in your community is next to none.
Just know that if they are forced to charge these additional fees, it’s likely because they need to cover costs. Smaller firms may feel like they must charge them because they just don’t have the assets that larger ones do.
Enter into fee negotiations with an open mind. And remember, title insurance is in your best interest.
Bundle Your Mortgage Insurance
When you purchase title insurance, you wind up requiring two separate policies. One is for your home purchase, and one is for the bank that holds your mortgage.
The two insurance policies are independent of one another. But that doesn’t mean that they carry the same rate.
Just as title insurance is to shield you from losing your shirt, they also protect the bank if you can’t make your payments. But since they are the corporate end of the deal, they’re getting a reduced rate.
You can get a drastically lower rate if you combine both policies. That way, you can save on both insurance policies. Usually, insurance companies offer both of these services, so it should be easy to combine them. Just make sure you’re using a reliable company that has good policies. There are a lot of insurance companies recently starting out that need clients, so it might be worth looking for some smaller insurance companies. If they seem to have a good website with their insurance logo on it, they are probably reliable and will be able to help you lower your insurance costs by combining the mortgages.
The borrower is often the one with the responsibility to purchase both coverages. You’ll want to cut as many costs on insurance as you can.
Negotiate with the Sellers
Even though you are responsible for the title costs, you don’t necessarily have to foot the bill. One thing to know about real estate transactions is that nearly anything is negotiable.
Historically, the typical seller is not going to agree to such a request. However, the country’s real estate market has remained in favor of buyers for the past several years.
As a result, more closed deals have incorporated the seller covering some, or even all, of the title fees. If the home’s asking price is steeper than you’d like, that may help balance the scale.
You may want to skip this method if you’ve already asked the sellers to make concessions. While you should reduce your costs, you also want to make sure that the sale completes.
However, if there have been a few price reductions on the table, the sellers are likely to remain open to the idea. Sellers want to close the deal as much as you do.
Inquire About Reissue Rates
In some sales, a home may qualify for a new title because the owner has already changed hands. For instance, if the house you’re interested in purchasing just sold within the past five years or so, you could save as much as 60%.
The problem is that a lender also receives a reduced rate, but on their commission. Although it may not seem the most ethical decision, they might not reveal that a reissue rate exists.
Before asking, you should attempt to look up what your area’s typical reissue rates run. While it may not present a ton of savings, any reduction helps.
Always remember that you don’t have to go with the firm that your brokerage recommends, as there are plenty of other options out there.
Register with Home for Heroes
Of course, if you want to ensure that you are getting the top value possible on all your housing fees, you have to sign up here for Home for Heroes. We have local affiliate experts in your community, ready to assist you with lower costs and better-personalized service.
The home buying process requires many different professionals working together to protect all parties. Make sure that you save on your new house, as well as other discounts.