This little-known federal law could save Coloradans big bucks when buying or selling a home
A little-known federal real estate law could save you hundreds or even thousands of dollars when buying or selling your home, industry experts tell CBS News Colorado.
Buying or selling your home can be an overwhelming process; there's so much paperwork to sign and fine print to read, that choosing a title company usually isn't top of mind, but according to federal law, consumers do have a choice and are not required to just go with the company recommended by their real estate agent.
"I don't think I've ever done a real estate transaction where I was given a choice. It was just sort of recommended based on the real estate agent, like, 'oh, I usually use so and so,'" recalled Natasha Hall, of Littleton. "I never pursued it further, because I didn't know that was a right of mine as a seller."
Hall just sold her home in Aurora and learned from her real estate company that she could choose which title company she wanted. By comparing different companies' rates, she says she was able to get a better deal.
"I was actually really surprised," Hall said. "I ended up saving around $600."
She says she was able to put that money toward a few home repairs.
"I was really happy to be working with someone who's so ethical and puts this kind of thing out front right away," Hall said.
Nick Wolff and his dad own a real estate consulting company together in Centennial. They've made it their mission to inform consumers about their right to choose, even building this online database to help people compare rates in their area.
"You can see differences between $400 to $2,800 on a property. You just don't know it based upon the single property. You have to go out and look. When was it last refinanced? When was it last purchased? You might qualify for discounts. The different title companies that you use can have different closing costs," Wolff said. "We took it upon ourselves to create this website, because we realized that it was a big piece of the puzzle that consumers aren't seeing, that they're paying for."
They've also tried advocating for a state law change to require better notification to consumers about their right to choose a title company.
"We've been working with the Division of Real Estate, the Real Estate Commission, who licenses, licenses and controls real estate brokers... for the last 15 years, feeding them information, saying, 'hey, consumers are missing out,' and it's really been for the most part, it falls on deaf ears," Wolff said.
While the title company your realtor recommends may very well be the best deal out there, Hall says she would support a notification requirement.
"It feels like the most ethical thing to do is to offer. I think so many of us who need to sell or buy real estate, we don't know as much about it and what our rights are within the process," Hall said.
Wolff says if you weren't given a choice in title companies during your recent real estate transaction, you can file a complaint with the Colorado Division of Real Estate. You can do so by clicking here.
Marcia Waters, the director of the Colorado Division of Real Estate, issued the following written statement for this story:
"The Division of Real Estate encourages consumers to select their own settlement service providers, whether that be a title insurance provider, a home inspector, an attorney, etc. Consumers should evaluate these professionals to determine whether they are able to provide the services that the consumer is seeking, and also contemplate the costs of those services. I am aware that a lot of consumers rely on the real estate brokers to suggest possible settlement services providers, but ultimately a consumer needs to do their own due diligence. If there are instances where real estate brokers are requiring the use of a particular settlement service provider, the Real Estate Commission may discipline the broker's license (depending on the circumstances). The Division may also refer the matter to the Consumer Financial Protection Bureau because that agency has the authority to enforce the Real Estate Settlement and Procedures Act, whereas the Real Estate Commission does not."
