Title company does not want to do closings under 100 K

Title company does not want to do closings under 100 K

Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

Title company does not want to do closings under 100 K….(San Antonio area)

So I have a title company that I have used almost exclusively for the past eight years and have given them tons of business and referrals. I realize they’re not the only title company out there it’s just they’re not too far from where I live and once you find something that works you just keep working it.

We sent in a contract yesterday and they sent word that due to a lot of business that they do not want to accept  closings less than 100 K. Keep in mind that they are able to make two escrow fees/closings off of one property, because we typically either resell the property or refinance the property after we fix it up. The resale or the refinance is typically way over 100,000. Most of the business I bring them is over 100,000 on the front in as well.

Is this sort of thing common with title companies to get a lot of business and then get a bit cocky? The thing is if we have to change title companies for small fry closings I will take all of my business to the title company that does small fry closings and not just hand-deliver larger files to the cocky title company and then deliver smaller closings to a hungry workable title company.

Has anyone experienced something like this?

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Owen DashnerPro Member
Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
4y

That is a stupid policy.  I am part owner of a title company - they still make closing fees on smaller size deals plus they also make money on title insurance.  Poor business practice in my opinion.  Small deals still keep the lights on.

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  • Lawrence BriggsPro Member
    Investor · Austin, TX · Member since 2020 · 367 posts · 377 votes
    4y

    Wow, I'm sorry that is happening to you @Joe S. Did they always have this over $100K requirement? Not trying to make any excuses from them just curious. I know that many companies' overhead have increased, but I believe they should make an exemption if you have given them so much business as a loyal customer. 

  • Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    4y

    I'd reach out to someone in a more senior position and get their take. It may be that everyone knows the 'policy' changed but the senior person sees the future business and understands that a few exceptions are in order for a client like you. At worst they say this is the way it is, and you start shopping for another title company. 

  • Owen DashnerPro Member
    Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
    4y

    That is a stupid policy.  I am part owner of a title company - they still make closing fees on smaller size deals plus they also make money on title insurance.  Poor business practice in my opinion.  Small deals still keep the lights on.

  • Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes
    4y

    These policies are not typically as firm as they say. I haven't seen this before, and it seems like bad business... they still make money on smaller closings. Do you have a POC person that you can talk to about this? Might just be poor management. 

  • Joe S.Pro Member
    OP
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y
    Quote from @Lawrence Briggs:

    Wow, I'm sorry that is happening to you @Joe S. Did they always have this over $100K requirement? Not trying to make any excuses from them just curious. I know that many companies' overhead have increased, but I believe they should make an exemption if you have given them so much business as a loyal customer. 


     Nope this was not their normal procedures to start off with. 

  • Joe S.Pro Member
    OP
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y
    Quote from @Owen Dashner:

    That is a stupid policy.  I am part owner of a title company - they still make closing fees on smaller size deals plus they also make money on title insurance.  Poor business practice in my opinion.  Small deals still keep the lights on.


    Yup it was small deals that got me more Bigger deals, but we still have small details from time to time. If I have to take my small deals to another title company I will more than likely end up giving all my business to the new title company not just the smaller price closings.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Joe S.:
    Quote from @Owen Dashner:

    That is a stupid policy.  I am part owner of a title company - they still make closing fees on smaller size deals plus they also make money on title insurance.  Poor business practice in my opinion.  Small deals still keep the lights on.


    Yup it was small deals that got me more Bigger deals, but we still have small details from time to time. If I have to take my small deals to another title company I will more than likely end up giving all my business to the new title company not just the smaller price closings.

    Not sure about others but escrow fee's which are direct revenue to the title and escrow company is the same no matter the purchase price..  they are flat fees.. dont go up or down.  title insurance does though and the tilte/escrow company is an agent for the underwriter and just makes a fee for selling the title insurance and that fee can go up of course as the price of the property directly relates to the fee the title insurance costs.
    but I have never seen sliding scale for escrow components based on price..

    now it maybe and i am just spit balling here but under 100k seems to be wholesaler dominated and or other high touch type assets buggered titles and other things that take a lot of time for no extra income.. just a guess.
  • Joe S.Pro Member
    OP
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    4y
    Quote from @Jay Hinrichs:
    Quote from @Joe S.:
    Quote from @Owen Dashner:

    That is a stupid policy.  I am part owner of a title company - they still make closing fees on smaller size deals plus they also make money on title insurance.  Poor business practice in my opinion.  Small deals still keep the lights on.


    Yup it was small deals that got me more Bigger deals, but we still have small details from time to time. If I have to take my small deals to another title company I will more than likely end up giving all my business to the new title company not just the smaller price closings.

    Not sure about others but escrow fee's which are direct revenue to the title and escrow company is the same no matter the purchase price..  they are flat fees.. dont go up or down.  title insurance does though and the tilte/escrow company is an agent for the underwriter and just makes a fee for selling the title insurance and that fee can go up of course as the price of the property directly relates to the fee the title insurance costs.
    but I have never seen sliding scale for escrow components based on price..

    now it maybe and i am just spit balling here but under 100k seems to be wholesaler dominated and or other high touch type assets buggered titles and other things that take a lot of time for no extra income.. just a guess.
    I haven’t thought of that before…
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