One way to know the real estate market is doing well is when you hear Realtor teams mentioning they are going to open their own Title Company. Now, I must preface by saying I don’t hear this on a regular occasion but in reality, I should hear this zero times…ever. There are many Realtors who don’t fully know or understand the full scope of what a Title Company does, let alone under the full scope of detail and liability they will be assuming by having ownership in…or fully owning a Title Company. Many see us Title Companies like the “piggy bank” and we rarely pay claims so we must be swimming in cash. That statement is far from the truth. In the hierarchy of real estate, we make less profit than the Realtor and the lender on a transaction. With this said, here are what Realtors don’t know about opening their own Title Company.
Ever since the new TRID rules came into effect in 2015 we have seen people opt-out and waive Owners Title Insurance on the final Closing Disclosure. Doesn’t help that Owners Title Insurance can be found under the “Other” section on the CD and “Optional.” It’s always been optional to obtain, but I feel they could have done a better job of not making it appear as a non-meaningful purchase. Every month, we have a handful of people that decide to waive Owners Title Insurance and find it as a useful way to save money on their real estate transaction. Waiving Owners Title Insurance may seem smart at first, but has a long-lasting impact on your largest asset, especially when you decide to sell your home. Before you decline his one time purchase–look yourself in the mirror and ask yourself these questions.