News:
Brokerage
Posted: October 19, 2021
Misconception: Title insurance companies make the most money in a transaction - by Jason Hudson and Dorian Lam
There are many common misconceptions about title companies. Today, we’ll cover one of them and outline the real story.
The Fallacy
New York City features some of the highest prices and taxes for real estate. It often seems, especially on larger commercial transactions, that the title company is making exorbitant fees.
The Reality
In a recent residential closing for a $5.9 million home, we collected $315,044 in buyer title fees, $32,612 in seller title charges, and additional seller title charges of $8,750. You can see that the total title charges are just over $356,000. While it isn’t broken out, the total title insurance premium for the buyer and lender was approximately $27,000 with the rest being for taxes and fees – title companies collect a variety of (in this case) state and city taxes and fees on behalf of various agencies. The title company doesn’t keep any of that money.
Typically, depending on the type of transaction, title insurance costs range from 0.30% to 0.50% of the transaction. Compare this to the 3-6% brokers charge, the 1-3.9% mansion tax paid to the city and state, or the 2.075% transfer tax the state and city took in (1.825% for transactions less than $3 million).
A Quick Word About Fees
It may seem as if everybody charges a tax or fee at the closing table, and the names of those taxes and fees can be obscure. You may wonder what you’re really paying for, and if those amounts are good values. A good title company or attorney should be able to explain every line item. It’s your money: Don’t be shy about asking!
If you have any questions about any aspect of title insurance or settlements, or if you would like to discuss an upcoming or potential transaction, please contact us.
Jason Hudson is CEO and Dorian Lam is executive vice president at Cornerstone Land Abstract, New York, NY
Tags:
Brokerage
MORE FROM Brokerage
Liberow and Benshar of Asset CRG Advisors arrange $18.1 million ground lease transaction for 358 Flatbush Ave. development site
Brooklyn, NY Asset CRG Advisors recently facilitated the disposition of 358 Flatbush Ave., a Brooklyn development site situated at the intersection of Park Slope and Prospect Heights overlooking Grand Army Plaza and Prospect Park.
Quick Hits
Columns and Thought Leadership
Strategic pause - by Shallini Mehra and Chirag Doshi
Many investors are in a period of strategic pause as New York City’s mayoral race approaches. A major inflection point came with the Democratic primary victory of Zohran Mamdani, a staunch tenant advocate, with a progressive housing platform which supports rent freezes for rent
Tri-state capital migrates nationally amid regulation pressure - by Reese Weaver
New York tri-state multifamily investors are increasingly reallocating capital to less-regulated markets across the U.S. as rent control and legislative risk erode returns at home. With over 60% of New York City’s rental housing stock classified as rent-stabilized, the traditional value-add model — buying under-performing buildings,
A fresh start - by Shallini Mehra and Amit Doshi
For the past several years, the New York City multifamily housing market has been defined by disruption. The combined impact of the HSTPA rent laws and a sharply higher interest rate environment has fundamentally reduced
AI comes to public relations, but be cautious, experts say - by Harry Zlokower
Last month Bisnow scheduled the New York AI & Technology cocktail event on commercial real estate, moderated by Tal Kerret, president, Silverstein Properties, and including tech officers from Rudin Management, Silverstein Properties, structural engineering company Thornton Tomasetti and the founder of Overlay Capital Build,
