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  • Writer's pictureJamie Koehler

Don't Let Excess Title Fees Impact Your Bottom Line

The following are true statements :

· In Maryland, the buyer has the right to choose the title company

· Certain title costs are customarily paid by the seller

· Title costs vary from one company to the next

Here’s a scenario that you, as a seller, will encounter unless your real estate agent controls the title costs issued to you from the beginning – before a contract is signed :

In Maryland, the buyer has the right to choose the title company. Title companies charge different fees. When I represented buyers in the past, I would help my clients collect various quotes from different title companies. I would then give them a side-by-side comparison of the fees so that the buyers could make a selection that made the most sense for them, the buyer. The quotes we received from the title companies had the title costs that would be charged to the buyers, but not the sellers.

Now taking on the perspective of a seller : the buyer has the right to choose the title company. You never receive a quote from the title company. A few days before settlement, a settlement sheet is circulated to you where you are shown, for the first time, what the title fees will cost you. Here’s an example of fees that I have seen charged to Sellers :

$300 – procure payoff $35 – release tracking

$175 - judgment search $45 – use of title company’s digital platform $25 – recording fee

I've see the fees get up to around $600. Are the title fees negotiable? Yes. You can always try to negotiate them. But ultimately, you are days from settlement and angry or not, most sellers will ultimately pay the title costs to get the deal to close. Remember also, that in Maryland, if you as a seller decide not to sell the property after a contract is accepted, the buyer can sue you for specific performance. As a seller, your feet are held to the fire to close.

Even if you ask the title company the buyer selected for a quote for title costs that will be charged to you, the seller, the title company is the buyer’s choice. You may be able to negotiate some of the fees, but ultimately again, the title company is the buyer’s choice.

So, what can you do to avoid being over charged for title costs? When a realtor lists a property on the MLS, we are supposed to upload the disclosures to that listing. Those disclosures are then incorporated into the offer the buyer writes and become part of the Contract of Sale. Every time I list a property for a seller, I include a special addendum that was created by my broker, Cummings & Co Realtors, that states that the buyer will pay for all settlement costs charged by the title company (unless prohibited by VA financing) except for the following fees at the below market rates : $200 to prepare/procure mortgage releases $50 to wire funds

We require the buyer to sign this as part of the offer. At this point, you as the seller, still have leverage. The buyer wants to purchase your property and will sign the form to have his or her offer considered. The buyer is welcome to take this into consideration when selecting a title company and should. This will motivate the buyer to not only get a quote for the title costs being charged to him or her, but also to find out what the title costs will be to the seller, knowing that anything charged in excess of the above fees, will be his or her responsibility.

There have been many occasions when I have received the settlement statement from the title company several days before settlement and found that the fees being charged to the seller exceed those outlined above. I kindly refer the title company to the addendum signed by both the buyer and the seller to reduce the fees to those agreed above.

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