Common Misconception: You Should Shop for Lower Title Fees

Purchasing a home is a costly endeavor. So it is understandable why prospective buyers always search for ways to reduce the expenses associated with the real estate transaction. Shopping around can help new home buyers save money on mortgage interest rates, home insurance, inspection and appraisal fees, and various other professional services. One of the most notable exceptions, however, is the title insurance policy they would need to purchase as an item of their closing.

The fact is that title insurance fees are regulated by most states and no matter what agent you choose to work within that state, you can expect to pay the same amount for your title insurance policy. The fees are not governed on a national level so they do vary from one state to the next. ANSTitle explains in more detail how title fees are regulated in the states of New York and New Jersey.  

 

Title Fees Regulation in New York

Title insurance cost in New York is governed by the Department of Financial Services. While DFS is responsible for approving the rates, it is the Title Insurance Rate Service Association (TIRSA) that determines and proposes the fees. Most title insurance companies in New York are members of TIRSA and adopt the rates once approved by the state.

TIRSA publishes a title insurance rate manual, which outlines the various fees, terms, and rules. The cost of the policy depends on the amount of insurance coverage needed, which typically equals the mortgage loan. 

The insurance coverage amounts are broken down in brackets and each bracket has a specific rate per $1,000. For example, the first $35,000 of insurance coverage will cost you a flat fee of $338. Each additional $1,000 of coverage up to $50,000 costs $7.52. The next tier of $50,001 to $100,000 costs $4.69 per $1,000 and so forth.

The manual also outlines the rates and various applicable discounts offered for refinancing title insurance policies, as well as pricing for a range of endorsements a home buyer may need for their specific situation. 

Title Fees Regulation in New Jersey

The title insurance governance in New Jersey is similar to that in New York. The New Jersey Land Title Insurance Rating Bureau, a title insurance rating organization licensed by the state’s Commissioner of Banking and Finance, prepares the rates on behalf of its members. The rates are then approved by the Commissioner. The Bureau publishes a rate manual containing the rates, fees, and charges for all title insurance policies in New Jersey. If a member company wants to charge different rates, they need to seek the approval of the Commissioner of Banking and Finance independently.

The rate schedule is based on the policy liability limits and each tier has an applicable rate per $1,000 of liability. Policies up to $100K cost $5.25 per $1,000. The next tier of $100,001 to $500,000 liability costs $4.25 per $1,000. There are two additional tiers for limits between $500,001 and $2 million, and over $2 million. So, if you have a policy for $500,000, you would be paying $5.25 per $1,000 for the first $100K plus $4.25 per $1,000 for the remaining $400K.

Benefits of Fees Regulation

The regulation of title insurance fees was implemented with consumers’ best interests in mind. Regulated costs can help you:

• save time – you don’t have to waste hours calling around to compare rates, because any licensed agent would offer you the same pricing;
• save money – since the state regulators have to approve all title insurance rates before they can be offered to customers, they prevent unreasonable price hikes;
• avoid scams – an agency attempting to charge different rates than the ones approved in the manual should be an immediate red flag.  

Getting a Title Insurance Quote in NY or NJ

While the manuals for both states are detailed and can be used by individuals to estimate the cost of a title insurance policy, they contain a number of rules, requirements, and exclusions that may not be immediately obvious to the average reader. Furthermore, the guidelines and the fees get updated periodically by the title insurance rating organizations in each state. So you would need to ensure that you are consulting the current version.

It is worth mentioning that there are a number of title insurance calculators online that can also provide you with a rough estimate. Once again, you would be relying on your understanding of title insurance and may end up with an inaccurate estimate by inputting the wrong data or failing to select an option applicable to your property.

Instead of trying to work out the cost on your own or relying on web calculators, you can obtain a much more accurate estimate by requesting a title insurance quote from an agent that is licensed in the state where your property is located. While pricing wouldn’t be a factor in selecting an agent, there are several other criteria you should consider when choosing a title company to work with.  

Questions to Help You Select a Title Insurance Company

• Is the company licensed by the state where the property is located?
• Is the company a member of the state’s title insurance rating organization?
• How many years of experience do they have in closing real estate transactions?
• Does the company have positive reviews from past customers?
• Are there any complaints filed against them with the state or the Better Business Bureau?

As a licensed New York title insurance company with over 50 years of experience, ANSTitle passes all the qualifying questions above. We can provide quick, accurate, and trustworthy title insurance quotes and can handle closings in all 50 states. Contact us today!