High insurance cost Empire State real estate buyers $155.3 million
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.
"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. ■