Seattle Real Estate Chat: Title Insurance

On Episode 6 of Seattle Real Estate Chat, we’re joined by Barbie Van Horn of First American Title and Escrow.  Barbie address what title insurance is and why it’s important for Washington State home buyers. She also addresses sewer capacity charges for King County, Snohomish County and Pierce County.

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Buying a home together before you get married

Last month I read an interesting article from Coldwell Banker about couples who are buying homes together before they get married. A survey was conducted which “revealed that 1 in 4 young couples are buying a home together before tying the knot”.

“…buying a home together has become “the new engagement ring” for some young couples. The homebuying process forces couples to deal with their competing feelings of money and how to spend it, and that is why successfully purchasing a home with someone else is deemed a significant accomplishment in any relationship. It means the couple has been able to overcome their differences in an effort to create a better future together.”

The survey found that 24% of couples who buy a home before they are married are 18 – 24 years old. When I bought my first house, I was 21 years old and it was with my (then) fiance…many years ago! :)

When couples buy together, before they are married (or if they never plan on marrying), they need to consider how they will vest on title. This is important because if either person passes away, how they hold title (vesting) may determine what happens to the home. Most often, vesting is determined a home is purchased by the language on the deed. Two single people who own a home together have different rights than a married couple in Washington state.

I’m not an attorney and I’m feeling a bit like “Debbie Downer” discussing this tidbit…but it is important to consider. Here are two brochures provided by title companies that you can review with your attorney to discuss how to vest in title.

And don’t miss this video of Tim Daniels, Title Officer discussing different ways to take title for real property in Washington state.

If you are considering buying a home anywhere in Washington state and need help with your home loan mortgage, I’m happy to help you!

How to Shop for Title Insurance or Escrow in Washington

I’m often asked by my clients if they can select their title or escrow provider and the answer is a big YES!  Some feel that title and escrow fees are all within a close range and this simply isn’t the case. I have seen fees for these services vary by hundreds of dollars.

Here are some pointers you may find helpful if you are interested in shopping for your title or escrow provider:

Know how your rates are priced.  With escrow on a purchase transaction, you will need to provide the sales price and let the escrow company know if there’s going to be a second mortgage or if a courtesy signing may be required or if it’s a short sale. It’s important to ask the escrow company for ALL of their fees. I’ve received quotes from an independent escrow company in Ballard where they try to pad their quotes with a $200 “miscellaneous fee” just in case something “pops up” during the transaction.  Ask the escrow company if the fee is the “full” fee or your “half”. Typically, in Washington the buyer and seller split the escrow fee. 

NOTE: If your escrow provider is a title company, most offer a significant discount on their title fees when title and escrow are at the same company with a purchase. This discount often applies to both buyer and seller.  Using two different title companies for title and escrow services seems like money flying out the window to me.

If your transaction is a refinance, typically the escrow company just needs the loan amount. As with a purchase, ask for “all” their fees. Do they charge a reconveyance processing fee, wire fee or courier fees (also possible with purchase transactions). 

Have the escrow company provide your quotes in writing – they should be able to easily email this to you.

With title insurance, the company will need to know your sales price and loan amount. For a refinance, they just need your proposed loan amount. They will also need to know which county the property is located.  In Washington, the seller typically pays for the owners policy and the buyer pays for the lenders policy.  With a refinance, the buyer pays for the lenders policy.  

Ask for possible discounts. Some title companies will provide an additional discount if you title is placed electronically via their website.

Start early. You’ll want to obtain your quotes before your purchase and sales agreement is drafted.  If you’re involved with a purchase transaction, real estate agents will try to direct where the title and escrow services are placed. Sometimes this is a legitimate concern where the agent has received excellent service from their escrow and title team and/or it could be that one of the real estate brokerages have an ownership interest in the title or escrow company (see below). Regardless, the consumer does have the right to select these service providers.  Some title or escrow companies may insist on needing a signed purchase and sales agreement before providing a quote which is not needed if you provide the above information (sales price, loan amount and county the property is located in).

If your transaction is a refinance, let your mortgage originator know that you would like to shop for these services at your loan application.

NOTE: Mortgage companies may have ownership interest in an escrow company as well. You are not required to use them – it is your choice!

Ask for recommendations. Talk to your real estate agent and mortgage originators about who they like to work with and why. Does their company have an ownership interest in these providers? Will the escrow company do amazing back flips to make sure your transaction closes smoothly and on time?  Ask your family or friends who have recently closed a transaction, who they used for title or escrow providers.

Know the relationships. A few of the big real estate brokerages have interest in title and escrow companies. In the greater Seattle area, we have the following large real estate brokerages who continue to maintain an interest in title or escrow companies:

  • Coldwell Banker Bain: Rainier Title; and Escrow Professionals of Washington (EPOW
  • Windermere: CW Title (formerly known as Commonwealth of the Pacific)

According to Northwest Title Company’s website, one or more principals at Routh, Crabtree, Olsen, PS, a firm located in Bellevue which does significant REO (foreclosure) escrow business, have interest in Northwest Title Company.

Higher fees does not always equate to better service.  I’ve seen some escrow companies that charge significantly more than what I would consider to be a fair market price. They may try to justify this because they have attorneys on staff or because the property is a short sale or foreclosure – ask why.  I have no problem with anyone being compensated for work performed as long as it is a fair market price.

Some companies make it easier for you to shop than others with rate sheets or calculators posted on their websites. I still recommend giving the title or escrow company a friendly phone call followed up with an email to obtain your personal quote in writing. I’m amazed at the lack of service I sometimes find when I call a title or escrow company to obtain a quote for my Good Faith Estimates.

I used to have my preferred title and escrow providers listed on this blog, however DFI felt that this was a potential violation of respa since they viewed it as free advertising even though I had a link to all title and escrow companies and encouraged consumers to shop. 

Bottom line: consumers are paying for these services and are free to exercise their right to shop for and select their title and escrow providers. 

Will Other Big Real Estate Brokerages Abandon their Joint Ventures with Title, Escrow or Mortgage Companies?

I’m hearing this morning that local real estate brokerage, John L. Scott has decided to terminate their joint venture business arrangement with Rainier Title and Escrow.  After seven to eight years of touting that business arrangements like this benefit the consumer, apparently they’re singing another tune.

My stance has always been that arrangements such as this do not benefit the consumer. They can actually prevent consumers from receiving the lowest title and escrow rates and it discourages the consumer from shopping when the real estate agent does their best to please their broker and keep that title or escrow with their pre-arranged company. Typically the real estate companies who have business arrangements discourage their real estate agents from using any other company and will often make it difficult (if not impossible) for outside companies to attempt to have contact with their real estate agents.  

So if the argument big companies like John L. Scott, to hold interest in title and escrow companies, like Rainier, is that it’s an advantage for the consumer – what’s changed?  Could it possibly be that these arrangements are no longer the cash-cows they once were for the managing brokers?

It will be interesting to see if the other local real estate companies who have title and escrow business arrangements, like Windermere and Coldwell Banker Bain, follow John L. Scott.

Buying a Waterfront Home in Washington

Are you considering buying a waterfront home?  The greater Seattle area has some beautiful neighborhoods located along the Puget Sound, including West Seattle’s Alki neighborhood, Ballard, Magnolia, Normandy Park and Des Moines, to name a few.  

The Talon Group has created a great video that discusses buying waterfront property on homes located in Washington State. Chief Title Officer Tim Daniels addresses tide lands and what to look for on your title commitment when buying waterfront.

Nice life vest, Mr. Daniels!

Mechanics Liens and Title Insurance Owner’s Policies

Did you know that it’s no longer standard practice for the Additional Protection Endorsement to be included on an Owners Policy?  This endorsement protects buyers from mechanics liens.  A mechanics lien can pop up for a certain period after closing when labor has been performed or materials delivered. 

I actually received several mechanics liens on one of my new construction homes in Federal Way when the builder did not pay all of his subcontractors.  Because I had this endorsement (which at that time was, for the most part, issued automatically) the title company protected me from the liens; determining which ones were valid and paying them.  I believe they bought my shower doors! 

This video is full of important information about mechanics liens and what home buyers in Washington need to be aware of, especically if they’re buying acerage or waterfront property.  The Talon Group’s Chief Title Officer Tim Daniels, provides some excellent advice for consumers and industry professionals…it’s simply too good not to share!

Senior Property Tax Exemption or Deferral? One places a lien on property!

I read this post this morning from The Talon Group and even though my background includes 14 years in the title and escrow industry, I had no idea about the different options for Seniors with property taxes…this is a must read!

Washington State provides two very different programs for our “well-aged” homeowners to help pay property taxes. The most popular program, Senior Property Tax Exemption allows seniors making less than $35,001 to “freeze” the tax value of their home (in the eyes of the assessor) at the current rate. As the assessed value rises or falls, the taxable value will be billed upon the lesser of the frozen or market value. Other than the Emergency Medical Services Levy, this program exempts all excess or special levies that are in addition to the regular levies. Seniors can even exempt themselves from paying for regular levies if their income is $30,000 or below. To qualify, you must be at least 61 years of age by December 31st of the application date. Renewals are sent out out at least every four years.

Click here to read the entire article.

Kudo’s to The Talon Group for dishing up great information for consumers!

Hold Everything! What is Your Title Company’s Recording Protocol?

Satchmortgageporter If you’re a long time reader of The Mortgage Porter, you know that my pre-mortgage career was in the title and escrow industry.  One of my early jobs was preparing documents to be recorded at King County.  Later in my career, as a sales rep, I would sometimes have the opportunity to “be a hero” by driving “rush recordings” directly to the court house in Seattle and either meeting the title company’s recorder or actually having to “walk on” the documents myself. Recordings are the deeds and deeds of trust that will be recorded at the county to become public record to give the world notice that you now own the land or have debt attached to the property.  (It also gives scammers notice to hound you with loan and other offers).

On a recent transaction, I learned that all title companies are not the same when it comes to how the manage their recordings.  When a title company receives documents from the escrow company, they are typically “on hold” meaning–do not record yet; or they’re a “walk on” which means, record as soon as possible.  It’s my understanding that most title companies keep holds at King County UNLESS they have verified with the escrow company that the documents are not scheduled to close for some time.  

This transaction involved a title company who apparently keeps recordings for King County at their Lynnwood office until they know they are released for recording and then they are sent with their recording courier.   Problems can arise when recordings are released later by escrow or if the courier faces high volumes of traffic with her commute to Seattle (what are the odds of that?).  I have been informed by their Senior Title Officer that they are changing their policy on keeping holds at their office.

It could be worth asking your preferred King County title provider:


Where do they keep recordings that are on hold? 

Will they do a special courier to the court house if needed? (a title rep can do this) 

Hopefully the recordings are kept at King County (or the appropriate county) so that in the event of a later release, the documents are prepared and ready to go to avoid delays with closings. 

Related Post: 

What Takes Place Between Signing and Closing

Is Your Agent in Bed with a Title Company?

Who’s Who with Local Title Companies