June 21, 2016
High-Priced Title Insurance Cost New York State Real Estate Buyers $155.3 Million in Unnecessary Premiums and Fees in 2015, According to New Study
OneTitle National Guaranty Company, Inc. (www.onetitle.com) today released a new report showing that buyers of New York State real estate – including homebuyers, investors and others – spent an estimated $155.3 million in excess title insurance premiums and related fees in 2015. The analysis shows the impact on nearly every real estate transaction, from starter homes to the largest commercial transactions, across every city and town.
The report’s findings are based on an exhaustive analysis of 182,487 individual real estate transactions recorded throughout New York State using data captured from tax and transaction records. The study includes purchases totaling $140.2 billion, reflecting the vast majority of transactions in 2015, and weighs the potential for savings through readily available lower cost title insurance options.
“There is a misconception that title insurance rates are set by law. As a result, even knowledgeable attorneys – who often end up making the selection – are unaware that lower cost alternatives exist, and therefore fail to inform their clients how much they can save,” said Daniel C. Price, Co-Founder, President and CEO of OneTitle, a direct title insurance underwriter that works directly with attorneys, lenders, loan officers and buyers. “This is in contrast to other major expenses in buying and selling real estate, like brokers’ fees, mortgages and lawyers’ fees, for which residential and commercial buyers understand they can shop around and save a lot of money.”
Failure to select lower cost title insurance options cost New York State real estate buyers $851 on average per transaction or 27% of the average cost of title insurance and related fees. On the average transaction under $200,000, buyers could save 33% of their total title-related closing costs, giving them back, on average, 1% of the purchase price of their home. For the largest transactions, the lost savings was well over $100,000 per transaction.
The study calculated total title insurance cost—including premiums and fees—using prevailing industry rates and fees for each of the 182,487 transactions and compared those to a benchmark incorporating OneTitle’s lower filed premium rates.
Other key findings of the study included:
- The median purchase price of real estate was $206,000 in 2015. The average price was $768,050.
- The study included purchases totaling $140.2 billion, reflecting the vast majority of real estate transactions in New York State in 2015.
- High cost title insurance premiums and fees impacted residents of every county. While the largest potential savings were in Manhattan ($28.1 million) and Brooklyn ($15.2 million), the savings in upstate counties could be nearly as large: Erie County was 5th in excess title costs ($9.4 million). Monroe and Onondaga Counties also made the top ten.
- Buyers in twenty-five separate counties, stretching across the entire state, each spent at least $1 million more than necessary in excess title-related closing costs in 2015. Savings would have exceeded $500,000 in 49 counties.
- Estimated title insurance expenditures for purchases—including both premiums and fees—was $817.0 million. This is only a portion of the total since the study only included purchases. Adding new loans and refinances would have increased this total significantly.
The full report, “Over-Priced Closing Costs: High Priced Title Insurance Cost New York State Real Estate Buyers $155.3 Million in Excess Premiums and Fees in 2015,” is available by request. Please contact firstname.lastname@example.org.
About OneTitle National Guaranty Company, Inc.
OneTitle National Guaranty Company, Inc. is a direct title insurance underwriter that saves homeowners, homebuyers and investors at least 20% (and often significantly more) on most transactions thanks to a combination of premium rates that are 10% lower than all of OneTitle’s major competitors and a decision to eliminate nearly all of the common fees charged in New York. By working directly with real estate attorneys, lenders, investors and homeowners—without any middlemen or intermediaries—OneTitle is able to offer, lower costs, an unbeatable level of service with immediate direct access to the ultimate underwriting decision makers, and significantly improved safety and security for the company’s clients. OneTitle is licensed by the New York State Department of Financial Services and backed by a significant reinsurance treaty.