Buyers’ title charges getting out of control

When it comes to real estate closings, Sellers and Buyers agree on almost nothing, except maybe one thing: They both hate paying  for title insurance. Clients on both sides react to paying for title insurance like they are being forced to pay for a minority interest in a strip mine in Nevada or a timeshare in Biloxi.

Typically, the seller pays for the owner’s title insurance policy for the buyer. The buyer pays for a lender’s title policy and also pays the closing fee.  In the past, the seller’s title bill is more than the buyer’s title charges. Not any more. The Buyer pays more than the Seller now. Way more.

I recently did a condo closing in Chicago and I was shocked at how high buyer’s title insurance has climbed. Below are the charges from this closing:

The reason for this is that the “closing fee” paid for by the buyer has climbed.

Also, title companies now pack every imaginable up charge known to man onto the buyer’s side of the title. Take a look at this list of extras from this same closing.





Most egregious here is the “chain of title” fee. All lenders request a 24 month chain of title. This is to verify that the title history of the property for the past two years. All the title company does is photocopy the title search and send it to the lender. Charging $250 for this is insane.

The biggest rip-off charge of all is the “inflation enhancement endorsement.” One title company, that will go unnamed, loves this one and adds it to the Buyer’s bill on all files. Supposedly this endorsement, which costs $150, will increase the amount of the title insurance as the property value rises. Just what everyone needs more title insurance coverage while home values are sinking by the day. I always ask to remove this one, because it’s a joke.

Title insurance is a necessity. But all these add-on charges are getting out of control. I know I’m supposed to have a nifty summary of what to do about this, but I really don’t . Just don’t pay for the inflation endorsement and budget accordingly if you are a Buyer.

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