When you sell or purchase a home, there will likely be a title company involved. A title company performs many tasks connected with three
main functions: ESCROW AGENT, TITLE AGENT, and SETTLEMENT AGENT.
As the ESCROW AGENT, the title company manages all incoming and outgoing funds associated with the transaction. These duties include
managing the receipts, reconciling and disbursements of the earnest money deposits, lenders funds, buyers’ funds, and sellers’ funds.
As the TITLE AGENT, the title company performs all duties necessary to issue title insurance. These duties include performing a title search,
underwriting to determine the marketability of the title, resolving title issues, and issuing policies.
As the SETTLEMENT AGENT, title company performs the actual closing, explaining all documents and collecting funds from sellers and buyers when applicable.
When the final settlement statement is received, consumers will see several fees associated with the duties performed. The title fees are not
regulated; only the title insurance is. Therefore, no title company will have the same fees.
Below are some of the common fees you may see and what they are for:
- Settlement Fee – fee to conduct the closing
- Title Search Fee – fee to conduct a title search (usually paid to a 3 rd party)
- Title Examination Fee OR Underwriting Fee – fee to underwrite the file
- Title Commitment Fee OR Title Binder Fee – fee for the document prepared with the requirements and exceptions to issue the title insurance policies
- Deed Preparation Fee – fee for the attorney to prepare the deed (seller fee only)
- Post-Closing Fee (includes wire fee, overnight fee, digital archive fee) – fee for all tasks performed after settlement
- Notary Fee – fee to have a remote closer come to you for closing
- Closing Protection Letter Fee – fee charged by the underwriter for an insurance letter related to fraud during closing
- Lender’s Title Insurance – premium for lender’s title insurance
- Owner’s Title Insurance – premium for owner’s title insurance
You have the right to get a list of the fees prior to agreeing to using the title company you, your realtor or your lender have recommended. It is highly recommended that you thoroughly research the title company you are considering. At the very least, get an estimate, read reviews, and call and speak to someone at the office.
Best of luck with your refinance or home purchase!