Colorado consumers like to save money and do not like to be misled about the products and services they purchase. Likewise, when selling and buying their homes, consumers have the same expectations of saving money when relying on their real estate broker’s expertise and recommendation of a title company for their title insurance and closing settlement services.
However, such expectations are far from reality, as consumers are deliberately being kept in the dark when it comes to their title insurance services.
The Colorado Division of Insurance licenses and regulates title companies and the Division of Real Estate and its Real Estate Commission license and regulates real estate brokers. Interestingly, these two agencies don’t allow brokers to inform consumers about title insurance and closing services. The state agencies claim it’s the consumer’s responsibility pursuant to a federal consumer protection law.
“The Real Estate Settlement Protection Act” guarantees consumers the right to shop, compare, and select a title company for closing on a property, and not the broker.
However, the Real Estate Commission does permit brokers to provide consumers with a recommendation, which is generally based on a broker’s self-interest to use their favorite title company, regardless of the costs to the consumer.
It was this lack of information to consumers that led me to create CompareTitleCompanies.com, back in 2007. This website allows people to shop and compare title insurance services in just a few minutes, like Trivago, Expedia, Google, Bankrate, and many other comparison websites. Companies pay to use this as a marketing tool, but consumers and brokers don’t pay anything to compare title company rates.
Needless to say, consumers are still not being properly informed by their brokers about the federal consumer protection law RESPA and that they have choices of what title company to choose. Consumers are also unaware of the possible saving of $442 to $4,847 on their title insurance and closing services, depending on publicly filed rates and fees and available discounts for homes located in the metro Denver area.
Homebuyers are also not informed about obtaining a Seller’s/Buyer’s Closing Protection Letter (CPL) that will better protect their money and closing process, at a minimal $25 cost. Lastly, consumers probably do not know that all Colorado title companies issue the American Land Title Association Owner’s Title Insurance Policy, which the provides the same basic coverages, but with a possible difference in costs.
Consumers should have concerns about the regulatory practices of DOI, DRE, and REC, which are misleading and impeding the consumer’s ability to shop, compare and select the right title company for their title insurance and closing services.
For years I have brought these harmful issues and documented practices to the attention of these state agencies, only to be told that consumers are not submitting any complaints, so there appears to be no problem to address. In response, I would ask these agencies a simple question; If a consumer is not informed and kept in the dark, how would they know to file a complaint?
In March of 2023, I again brought this topic to these agencies by submitting a formal request and proposing a new real estate disclosure form titled “Disclosure of Information, Duties, and Authorization Regarding Title Insurance & Closing Settlement Services,” providing for more information and transparency for the benefit of consumers. This proposed disclosure can be viewed at https://www.comparetitlecompanies.com/disclosure.pdf.
Now 13 months later, this topic appears to have again fallen on deaf ears with no discussions. Meanwhile, consumers continue to be uninformed and exposed to potential harm.
While waiting for the DRE and REC to hopefully review and approve such a disclosure, you can shop 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 Closing Protection Letter when ordering your title insurance and closing services.
If you have questions about the duties and information provided by your broker, or the proposed disclosure, please contact the Division of Real Estate at dora_realestate_website@state.co.us.
Garry Wolff is a managing partner of TI Services LLC., which operates CompareTitleCompanies.com and can be reached at Contact@CompareTitleCompanies.com.
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