Is there any leverage on title fees in a county with only one title company

Question

A common situation in thin rural markets: a single title and abstract office serves the entire county, and their fee sheet on a modest purchase, say $68,000, includes a search fee, an exam fee, a closing fee, a document prep fee, and a courier charge that together make up a larger share of the purchase price than a buyer might expect elsewhere. Worth noting first that in many states the title insurance premium itself is regulated or filed with the state, so that portion is not really negotiable, while closing and service fees may be more flexible. This varies by state and should be confirmed locally before assuming either way. There are two reasonable approaches for a buyer expecting to be a repeat customer in a thin market. One is to simply ask, since fees can sometimes be waived and the downside of asking is minimal. The other is to accept the fees as posted, on the reasoning that being easy to deal with in a market with only one provider carries real value over time, since that office will be handling every future file. Which approach makes sense generally depends on how much is actually at stake on a given purchase and how many future transactions are realistically expected through that same office.

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

Across small county markets the single title office situation is common enough that it stops being a problem and becomes a line item. The practice that works is to call and ask for the fee sheet before making an offer, so the number sits in the model instead of arriving as a surprise at the commitment. And @laurenkim53, 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

@aliyahb 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 have a backlog, is a much better trade than the $2,000. The weakness in that argument is that goodwill cannot be priced, so it is being asserted to beat a known $2,000. In a market with one provider it is still the better trade. In a market with four, shop hard, and @stephenok9's single line item approach is the right way to do it either way.

Is there any leverage on title fees in a county with only one title company

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