A for sale sign stands outside a home listed for sale in Denver, Wednesday, April 3, 2024. The supply of homes for sale increased nearly 20% last month. (AP Photo/David Zarbowski)
Colorado consumers like to save money and don’t like to be misled about the products and services they purchase. Similarly, when buying or selling a home, consumers have the same expectation that they can save money by relying on the expertise of their real estate broker and the recommendation of a title company for title insurance and settlement services.
However, as consumers are purposefully uninformed about title insurance services, such expectations are far from reality.
The Colorado Department of Insurance licenses and regulates registration companies, and the Department of Real Estate and its Real Estate Commission licenses and regulates real estate brokers. Interestingly, these two agencies do not allow brokers to tell consumers about registration insurance or settlement services. The state agencies argue that, under federal consumer protection law, that is the consumer’s responsibility.
The Real Estate Settlement Protection Act guarantees consumers the right to select, compare and choose a listing company rather than a broker when settling on real estate.
However, the Real Estate Board does allow brokers to make recommendations to consumers, which are usually based on the broker’s self-interest to use their favorite registration company regardless of the cost to the consumer.
This lack of information to consumers is what prompted me to create CompareTitleCompanies.com in 2007. The website allows users to compare title insurance services in just a few minutes, similar to many comparison websites like Trivago, Expedia, Google, Bankrate, etc. Companies pay a fee to use it as a marketing tool, but consumers and brokers don’t have to pay a fee to compare rates from title insurance companies.
Needless to say, consumers have yet to be properly informed by their brokers about the federal consumer protection law RESPA and the options they have when it comes to choosing which title company to use. Consumers also don’t know that they could potentially save anywhere from $442 to $4,847 on title insurance and settlement services, depending on publicly submitted rates and fees, and discounts available for homes in the Denver metropolitan area.
Home buyers are also not informed about how to obtain a Seller/Buyer Settlement Protection Letter (CPL) which, for a minimum cost of $25, would better protect their funds and the settlement process.Finally, consumers likely are not aware that all title companies in Colorado issue American Land Title Association Owner’s Title Insurance policies, which provide the same basic coverage but may vary in cost.
Consumers should be concerned about the regulatory practices of DOI, DRE, and REC, which are misleading and impede consumers’ ability to search for, compare, and select the right title company for title insurance and settlement services.
I have reported these harmful problems and documented practices to these state agencies for years, only to be told that because consumers have not filed complaints, there appears to be no problem to address. In response, I would like to ask these agencies a simple question: if consumers are not notified and informed, how will they know to file a complaint?
In March 2023, I submitted a formal request to present this issue to these agencies again by proposing a new real estate disclosure form entitled, “Disclosure of Information, Obligations and Authorizations for Title Insurance and Closing Settlement Services,” to provide more information and transparency in the interest of consumers. This proposed disclosure can be found at https://www.comparetitlecompanies.com/disclosure.pdf.
Now, 13 months later, the issue once again appears to be ignored and undiscussed, while consumers remain poorly informed and exposed to potential harm.
While you wait for the DRE and REC to review and approve such disclosures, you can search for your own title insurance company or compare prices at www.CompareTitleCompanies.com Additionally, you can ask your broker to request a seller’s or buyer’s settlement protection letter when ordering your title insurance and settlement services.
If you have any questions about the obligations or information your broker may provide or the proposed disclosures, please contact the Real Estate Division at dora_realestate_website@state.co.us.
Gary Wolf is managing partner of TI Services LLC, which operates CompareTitleCompanies.com, and can be reached at Contact@CompareTitleCompanies.com.
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