New York City Real Estate Buyers Spent $81.2 Million in Excess Title Insurance Premiums and Fees in 2016, Per New Study

OneTitle Shows Significance of Savings Through Analysis of 46,699
Transactions Citywide

NEW YORK–(BUSINESS WIRE)–OneTitle National Guaranty Company, Inc. (www.onetitle.com)
today released a report showing that in 2016, buyers of New York City
real estate – including homebuyers, investors and others – spent an
estimated $81.2 million in excess title insurance premiums and fees,
costing the average buyer an extra $1,739 or 24.7% more. The analysis
reflects the significant financial impact of high-priced title insurance
on nearly every real estate transaction throughout the five boroughs,
from starter homes to the largest commercial transactions.

The study’s findings are based on an exhaustive analysis of 46,699
individual real estate transactions recorded throughout New York City
using data captured from tax and transaction records. It includes
purchases totaling $156.1 billion, reflecting the vast majority of
transactions in 2016, and demonstrates the potential for savings savvy
commercial and residential buyers can achieve through lower cost direct
title insurers such as OneTitle.

The report is the second annual analysis from OneTitle documenting
excess spending on title insurance. The first,
released in June 2016, showed the impact of high-cost title insurance
across New York State in 2015, but didn’t include State Island due to a
lack of available data at the time of that report’s release.

“At OneTitle, we are dedicated to lowering the closing costs for
commercial and residential purchases and refinances. We are shattering
the myth that title insurance rates are fixed by law, a misconception
that too often keeps real estate buyers, developers, attorneys and
lenders from shopping around to secure the best price for themselves and
their clients,” said Daniel C. Price, Co-Founder, President and CEO of
OneTitle. “Potential savings from lower cost title insurance options are
especially significant in a city like New York, considering that the
high price of real estate makes title-related expenses—and the potential
savings—so large.”

The study calculated total title insurance cost—including premiums and
fees—using prevailing industry rates and fees for each of the 46,699
transactions and compared those to a benchmark incorporating OneTitle’s
lower premium rates, as filed with the New York State Department of
Financial Services.

Other key findings of the study included:

  • High cost title insurance premiums and fees impacted residents of
    every borough. While the largest potential savings were in Manhattan
    ($32.0 million), buyers in Queens and Brooklyn also lost out on large
    potential savings ($21.1 million and $19.2 million, respectively).
    Buyers in the Bronx and Staten Island could have saved $5.1 million
    and $4.6 million, respectively.
  • On the average transaction under $200,000, buyers spent an extra 47.0%
    in title-related costs on average. That represents more than 1% of the
    purchase price of their home. For the largest transactions, the extra
    cost totaled well over $100,000 per transaction.
  • The median purchase price of NYC real estate (combining residential
    and commercial) was $700,000 in 2016. The average price was $3,343,677.
  • The study included 46,699 purchases totaling $156.1 billion in New
    York City in 2016.
  • Estimated title insurance expenditures for New York City
    purchases—including both premiums and fees—were $616.4 million. This
    is only a portion of the total since the study did not include the
    significant premiums and fees attached to new loans and refinancing
    transactions. By opting for lower cost options, buyers could have
    reduced this total to $535.1 million, a savings of $81.2 million.

Title insurance savings calculated in the analysis don’t reflect OneTitle’s
new, lower rate structure
, which went into effect in February 2017
after the company received approval for the new rates from the New York
State Department of Financial Services. The new OneTitle rates – which
are 25% lower than prevailing rates – are applicable for real estate
transactions of $15 million or more, including purchases, loans and
refinances throughout New York State.

The full report, “Over-Priced Closing Costs – New York City Edition:
High Priced Title Insurance Cost New York City Real Estate Buyers $81.2
Million in Excess Premiums and Fees in 2016,” is available by request.
Please contact peter.weber@onetitle.com.

About OneTitle National Guaranty Company, Inc.

OneTitle National Guaranty Company, Inc. is a direct title insurance
underwriter that generally saves investors, homeowners, and homebuyers
at least 20% on most transactions thanks to a combination of premium
rates that are 10%-25% lower than OneTitle’s major competitors, and a
decision to eliminate nearly all of the fees commonly charged in New
York. OneTitle is licensed by the New York State Department of Financial
Services. OneTitle policies above $250,000 are backed by risk attaching,
reinsurance coverage by a $1.5 billion global reinsurer rated
A-(excellent) by A.M. Best. For more information, visit www.onetitle.com.

Contacts

LAKPR
Sharon Horowitz, 212-329-1428
shorowitz@lakpr.com