By Timothy M. Dwyer
RISMEDIA, April 21, 2010—In the current real estate market, you need every tool available to get would-be clients to sign on the dotted line. Home buyers may be waiting for real estate prices to bottom out so they can purchase more home for their money.
Home sellers may be waiting to list their homes until prices start to rebound. In both cases, you may be able to push a buyer or seller to act now or bridge the difference between the buyer’s offer and what the seller will accept by providing a solution to reduce their closing costs.
For home buyers, lower closing costs mean they can afford more home with their current budget, lower their overall mortgage payments or simply be able to bring less cash to the closing. For home sellers, offering to pay the closing costs for the home buyer can close the deal.
Title insurance is probably the largest single expense in the bundle of closing costs listed in Section 1100 of the new HUD-1 document. Almost every lender will require title insurance to protect their interest in the mortgage. Called a loan policy, this title insurance policy is most often paid for by the buyer. It also makes sense for the buyer to have an owner’s policy, which offers similar protection for the owner as the lender’s policy does for the lender. Who pays for the owner’s policy depends not only on customs in the local area, but also good negotiating on the part of the buyer. When both policies are purchased at the same time, the price for the loan policy is drastically reduced.
The Real Estate Settlement Procedures Act (RESPA) gives consumers the choice to select their own title insurance and settlement provider(s). But unfortunately, consumers often don’t even know what title insurance is, let alone how to shop for it. By informing your clients of this choice and giving them direction on how to shop for and select providers, you could potentially save them hundreds, if not thousands of dollars in closing costs.
How can you shop for title insurance?
Searching online is your best bet for finding title insurance and settlement services in your area. Closing.com lists providers by location along with price but remember that any results should be sorted by PRICE so that the least expensive options are listed at the top of the page.
Or you can check out http://www.EntitleDirect.com, the first title insurance underwriter selling direct to consumers with savings as much as 35% or more compared with competitors, according to the company. Other sites such as FreeTitleQuote.com and EasyTitleQuote.com allow you to request multiple quotes via email. Offer these shopping tips to your clients. Or better yet do the research for them as part of the high level of customer service you provide your clients.
What to look for in a title insurance company
Before you recommend a title insurance or settlement provider(s) to your clients, you should do your own homework. Call the companies to find out:
• What geographic areas the company services?
• What specific services they offer and at what price?
• Will your client be assigned a dedicated professional to assist with coordinating the closing?
• Where will the closing take place? Does the company have mobile notaries/attorneys and can they schedule the closing at a location convenient to your client?
• If the provider is a title insurance agent, what company will be underwriting and issuing the policy, then check that company’s Financial Stability Rating ® with Demotech (www.demotech.com). Demotech is the leading title insurance rating company.
Help your clients avoid overspending on title insurance and settlement services. Point them in the right direction to save them hundreds if not thousands of dollars, and in the process, build a base of clients who not only respect your real estate knowledge, but also view you as their real estate advocate.
Timothy M. Dwyer is CEO of Entitle Direct Group, Inc., parent company of EnTitle Insurance Company and ENTITLE DIRECT. Reach Tim at tdwyer@EntitleDirect.com or 203-724-1150, or visit www.EntitleDirect.com/mortgage.
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