One title company in the whole county. Do I have any leverage?

Question

Looking at low price point houses in a county where there's essentially one title and abstract office. Everybody uses them because there is nobody else. Their fee sheet came back with a search fee, an exam fee, a closing fee, a document prep fee, and a courier charge, and on a $68,000 purchase the total settlement side is a bigger percentage than I expected.

I've read that in a lot of states the title insurance premium itself is regulated or filed with the state, so the premium isn't really negotiable, while the closing and service fees might be. That varies by state, so I need to confirm how mine works.

The question is whether it's worth doing anything about it. Two views.

One, ask. Fees are fees, they set them, they can waive some. Worst case they say no and I've spent one email. On a small purchase, $400 saved is real money against my numbers.

Two, don't. There's one office, I'm going to be back there four more times if this works, and the person who does my files remembers who haggled over a courier charge. Rural markets run on being easy to deal with. The $400 buys goodwill that gets my file worked when they're busy.

I genuinely don't know which of those is right and I'd like to hear from people who've bought repeatedly in thin markets.

stephen_ok9 · Answer

Ask, but ask about the fee that's easiest for them to explain away. Courier and doc prep charges are often padding on a fee sheet, and asking about one line item reads like diligence. Asking about all five reads like haggling. That's a different conversation.

devon_pierce · Answer

I've got a list of small county markets I'm working through and the single title office situation is common enough that I stopped thinking of it as a problem. What I do instead is call and ask for their fee sheet before I make an offer, so the number is in my model rather than a surprise at the commitment. @hollow, did they give you the sheet up front or did you have to ask?

aliyah_b · Answer

$400 on a $68,000 purchase is about six tenths of a percent. I'd want to know what that does to your all in first year cost before I decided it was worth a relationship. On my own first deal spreadsheet the settlement line was the one I'd underestimated worst, so I'd rather find out early and put the real number in than shave it and hope.

Separate thing, and this may matter more than the $400. Does that office actually run escrow, or do they close through an attorney? In some states the closing is an attorney function and that's a second fee you may not have on the sheet yet. Worth asking them directly what the full stack looks like, because that answer changes by state.

hannah_west29 · Answer

@tally has the right frame and the wrong conclusion size. Six tenths of a percent on a single purchase is noise. Six tenths of a percent on five purchases in the same county, where you are now the person the one title office recognizes and works first when they've got a backlog, is a much better trade than the $2,000.

What's wrong with my own numbers there is that I can't price goodwill, so I'm asserting it beats a known $2,000. I'd still take it in a market with one provider. In a market with four I'd shop hard, and @meridian's single line item approach is how I'd do it either way.

One title company in the whole county. Do I have any leverage?

4 replies