Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
I've been calling some local title companies, asking about their fees, services, etc. One place advised me to just use the bank's title co., because the banks will make the whole transaction very difficult if I don't use their title co. I hadn't heard this before, and was surprised. Is this really true? Also she told me I may get stuck paying for the Doc Stamp if I select my own title co?
SFR Investor · Orange County, CA · Member since 2009 · 1k+ posts · 1k+ votes
15y
Doesn't the seller typically pick the Title and Escrow company? Normally you would be able to discuss this with a real human seller, but not with an entity like a bank. It's their way or the highway. Jerks!
Orlando, FL · Member since 2009 · 2k+ posts · 282 votes
15y
Originally posted by Mitch Kronowit:
Doesn't the seller typically pick the Title and Escrow company? Normally you would be able to discuss this with a real human seller, but not with an entity like a bank. It's their way or the highway. Jerks!
Mitch,
Well as I understand it, with the REOs, by law you have the right to choose your own title co., but then you have to pay for that on your own.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
Generally, banks offer to pay for an Owner's Title Insurance Policy if you use their closing company, but if you select a different closer, they will not pay for this.
That said, there are several reasons to use your own closer:
- If you shop around, the cost of the title insurance policy will be less than the extra fees you're paying to use the bank's closing company. In fact, the big REO closing company in my area charges $750 for attorney fees, whereas my closing company normally charges $400 (and they only charge me $200). The typical owner's title policy is about $150 on one of my REO purchases, so I'm saving about $400 using my own closer (and would still save $200 even if I didn't get a discount).
- When I used to use the bank's closing company, it would typically take about 4-6 weeks to get the deals closed. My closer can generally do it in less than a week. In fact, my past 3 closings have been on-average less than 7 calendar days from the time the contracts were ratified.
- Typical REO closing companies do a lot of business these days, and in my experience, it's not uncommon to sit in a waiting room for 2 hours waiting to sign your documents on closing day. My closing attorney comes to my house (or invites us to his house for dinner) and we sign the papers there.
- I've had REO closers who have tried to get away with limited title searches (luckily my lender caught them doing it). My closing company wouldn't cut corners on title searches, meaning there is less risk on the back end.
By the way, I've never had a bank have an issue with my selecting my own closing company. Generally, I don't put it in the original contract, but include it as part of any counter-offer I make during negotiations.
Of course, these are just my experiences...other investors in other locations may have different experiences and I've heard that other REO closing companies aren't as bad as the ones I'm used to...