You really need to pick your own title company

Few consumers understand that the title company that performs the closing on their house may be the most important service provider in the entire transaction. Title companies investigate title, they examine title and they make the incredibly important title and closing decisions that have an enormous impact on your transaction. They need to be impartial. That means that they can never be related to your brokerage firm.

Consider that most Realtors used to give their clients a list of 3 title firms to choose from with the disclosure that they are not affiliated with any of them. Today Realtors give their clients two choices – use my title company or go find your own. Realtors are responsible for most people overpaying for closing costs and using completely conflicted firms to do the work. If your Realtor recommends an affiliated title company, that is reason to stop trusting your Realtor in all matters.

How to select a title company:

  • Compare. Look for comparison sites that might disclose how much title companies charge and whether or not they are affiliated. In Minnesota, there is a local firm that provides a comparison of 20 title firms (click here). The regulatory division in Nevada compares even more (click here).  Disclosure – CAARE’s Executive Director used to own the Minnesota company referenced above.
  • Get a Quote. Visit the websites of the title firms you are considering and get online

    fee quotes. Ask the firm that you select to guaranty your quote won’t change.

  • Are they Rated? Visit the rating sites for any firms you are considering such as Yelp, BBB, GooglePlus, etc…
  • Enforcement Actions. You need to determine the name of the regulatory authority for your state. Most states allow you to look up licensees to see if they have enforcement actions. 
  • Social Media and ads. Search the firms you are considering for any evidence that they are throwing parties for Realtors, taking them to sporting events or any other inappropriate activities. In the real estate world, kickbacks are very illegal and are broadly construed to include “anything of value.”
  • Matching Fees. Watch out for Realtor induced fee matching. Especially if the firm is related to the Realtor’s firm. 

Our Advice

  • DO NOT TRUST your Realtor to make the title company selection for you.
  • NEVER use a title company that is affiliated with another service provider in your transaction.
  • ALWAYS look for an independent title company.

Why would you trust a  Realtor to recommend a title company when they have a huge commission riding on your transaction closing? 

Don’t believe the Realtor  who claims that they get nothing in return for in-house referrals. Realtors receive all kinds of substantial benefits from recommending in-house title firms: Better commission splits with their broker, more referrals, more floor time, better offices, lower rent, and anything else the broker can concoct. Many supervising brokers put extreme pressure on agents to steer clients into their in-house services.

Title companies owned by brokerages do not have to compete on service or price. Since most of their customers are steered to them by trusted Realtors, very few customers ask questions about price. And for the few savvy consumers who do ask, those

firms will typically match the fees of the independent firms. But don’t fall for it. These are companies that were willing to overcharge you in the first place. Worse, their conflicts make these firms very unsavory choices. Consumers are not just overpaying. They are being subjected to terrible conflicts of interests. In addition, these affiliated firms are not just hurting consumers, they are destroying competition in the title insurance industry. If you want to save money, receive truly unconflicted service and do your part to improve competition in this industry, select an independent title firm.

Independent title firms truly compete on service and price. UNLESS they pay kickbacks!

Seek out independent title firms that are not affiliated with Realtors, lenders, builders, attorneys or any other service providers. Then check for enforcement actions against the firm and search their social media for evidence of kickbacks or improper associations with other service providers. We’ve posted many examples on our website about how title firms routinely pay kickbacks to Realtors. Many of these make the local news. Avoid these firms.




Minnesota’s Liberty Title fined $45,000

Minnesota’s Liberty Title was fined $45,000 for allegedly providing “numerous things of value” to a licensed real estate salesperson in exchange for settlement service referrals. Last year the Commerce Department fined Title Smart for allegedly engaging in another kickback scheme and they were fined a similar amount (click here).

The Liberty Title case is significant in the sheer number of infractions (11) and dollars allegedly spent by Liberty Title on this one licensee. What is shocking is that any one of the infractions could have resulted in a serious licensing violation. To see eleven infractions in just one case is over the top and should set off the alarms for regulators all over the country. We believe the DOC was using this case as an example to demonstrate what Liberty was doing with many of their other customers. We have seen evidence of Liberty sponsored events that involved over 300 of their customers. Plus, this isn’t Liberty Title’s first run-in with the Minnesota DOC.

Although the DOC applied a percentage of business referred analysis to this case, we don’t think they needed to. Providing things of value to a licensee who was in a position to send them referrals was probably enough. The fact that this particular licensee apparently increased their referrals to Liberty after receiving these things of value is disturbing. Realtors in Minnesota are fiduciaries and it becomes predatory if their advice to clients is influenced by bribes.

This action is important because title companies provide key services that ensure the integrity of the transaction and consumers rely heavily upon the title company selection advice that they receive from their Realtors or loan officers. Consumers are particularly vulnerable because they do not understand what title companies do, how much they charge and why they are important. Therefore, it is so important that the advice that they receive from their agents and loan officers is free of inappropriate influences that could result in bad service, overpaying and even title claims.
Title companies investigate and examine title and make important title and closing decisions. It is extremely important that their work is completed impartially and not influenced in any way by financial relationships with Realtors, loan officers, attorneys, or builders. Federal law on kickbacks is extremely strict and clear and has no minimum tolerances. RESPA (“Real Estate Settlement Procedures Act”) prohibits the giving and accepting of “any fee, kickback or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” That means that a title company shouldn’t even buy a Realtor a cup of coffee.

Unfortunately, the problem with kickbacks is severe throughout the country and consumers should be on the lookout and avoid all kinds of cozy relationships. Consumers should also be aware that the Realtor lobby was successful in carving out a huge exception to the anti-kickback provisions for affiliated title companies. While it may now be legal for title companies to affiliate with real estate brokers, lenders and builders, we believe that they are still bad for consumers. At the very least such relationships raise all kinds of conflicts of interests that should concern consumers. Do you really want a broker with a 5 figure commission riding on the deal closing influencing the decision making process of the title company?

Our advice to consumers is to Google their state with “independent title company” or “compare (insert state) title companies” and decide for themselves who they feel most comfortable closing. Not only might they avoid conflicts, they might find themselves saving some money too.

Links to Liberty Title’s Enforcement Action (click here)

Consumer Alert – Los Angeles consumers

Consumer Alert – Los Angeles Realtors are delaying distribution of sellers’ listing data to online real estate sites.

A Realtor controlled MLS in the Los Angeles area is intentionally delaying data feeds of property listing data to the top buyer frequented websites in the United States. Based on the information that we have reviewed, real estate agents and brokers, through their Realtor Association and MLS have acted in concert to thwart the successful business models of, and by tainting the data they send to them with an intentional 48 hour delay. This practice is harmful to consumers and competition.

InmanNews released a story on this in which we were quoted (click here to read that story).

We have a really hard time with this policy for a number of reasons. First, we really like the business models of (which takes For Sale By Owner listings) and to a lesser degree and (which do not) because they are consumer friendly and help sell homes. The crazy thing is that each of these online businesses actually help Realtors do their job better (many Realtors love these free online services) and they do it for free. Realtors are not out any money if Zillow finds a buyer because the Realtor still gets paid the listing portion of the commission.

So why would some Realtors not like them?   Get ready for this – because many Realtors and brokers want to collect a double fee even if it harms their own clients.  It is not good enough that Zillow gets the house sold, some Realtors and brokers (mostly the mega brokers who control the local Realtor Associations) believe that they are entitled to interfere with their clients’ interests in selling their home in order to improve the chances of collecting both the listing commission and the commission offered to the buyer’s broker (a double fee).

Realtors are conservators of their clients’ data and must serve their clients’ best interest above all others (especially their own). Realtors have exclusive access to client data only because of a state licensing privilege. We believe that violating those client and state duties to collect a double fee may constitute a fraud on both the consumer and the state licensing board. To do so in concert with the entire Realtor Association may be a form of price fixing and anti-competitive activity that would hopefully interest the U.S. Department of Justice, Antitrust Division.

When a Realtor undertakes to sell a client’s home, they pledge to sell that home for the highest price and in the shortest time possible. They do not pledge to manipulate the marketing of their client’s home  in order to pocket a double fee. When the broker collects both fees they also strip both the buyer and seller of their right to the broker’s representation in negotiations (click here to learn more about problems with dual agency).

Unfortunately, brokerage firms and Realtor Associations around the country have engaged in complex manipulations to fix or increase the chances of collecting double fees for years. The Los Angeles Realtors have taken this to a new level by involving the entire Realtor Association to act in concert to undermine online real estate sites. This does not just hurt Zillow, Trulia and, it harms the quality of the data that consumers rely upon to buy homes. Somehow we do not believe that the California Department of Consumer Affairs, Bureau of Real Estate intended brokers to use their state privileges to intentionally taint property data.

For years, Realtors and MLSs all over the country have engaged in another similar anti-consumer and possibly illegal practice of conditioning access to listing data to anti-consumer requirements. For example, most MLSs will only allow access to “their” data (its the sellers’ data) if the online sites agree to steer buyers back to the listing broker of the property. What consumers are not told is that practice improves the chances of a double fee for brokers and the forfeiture of broker representation for both the buyer and seller. That means do it yourself home buyers who click on the listing broker do not save money, but instead forfeit their right to representation without so much as a “disclosure.”  We believe this practice is also a misappropriation of state licensing authority.

Realtors have the opportunity to list in real time their clients’ listings for free on a multitude of websites with very little effort. These sites often have far more technologically advanced software than Realtor Associations and provide a real service to Realtors and sellers. We recommend that all consumers demand that their brokers immediately list their properties (that means no delay) on Zillow, Trulia, and the other major online free real estate portals so that they get great national and local exposure of their properties. 

Here is a video from the Today Show ON HOW NOT TO MARKET YOUR PROPERTY.

Advice for real estate consumers who are victims of this practice:

1. Contact us and tell us your story (especially if you would like to be a plaintiff in a class action lawsuit)

2. File a licensing complaint with California Department of Consumer Affairs (click here to access their webpage)

3. Add language to your listing contract requiring to list your property on Zillow and the other online sites immediately and to provide you with proof that was done.

4. Use this as a negotiating point to negotiate a lower commission.


Minnesota Consumer Alert – Edina Realty

Consumer Alert – We found the following problems with Edina Realty’s listing practices contained in a 2011 listing contract provided to us (we appreciate a newer copy if you would like to send us one). This list is not meant to be comprehensive.

1.  Anti-consumer Marketing Practices. Edina Realty excluded most of their clients’ listings from, Trulia and (the top buyer frequented websites in the country) for three years. We believe they may still be doing this on many of their properties. This practice increases the chance that Edina Realty will collect a double fee while likely sacrificing their clients’ interests in selling their homes for the highest price and in the shortest time possible. Click here to watch a short video from the Today Show on How Not To Market Your Home Online.

Edina Realty includes the following boilerplate language in the listing contract we have:

2. Pocket Listings. This is the practice of intentionally withholding listings from all marketing websites, including the MLS. Agents may advise their sellers that it is a good idea to test market the property just within Edina Realty for a few weeks in order to gain information about the price and how well it shows. They may provide other reasons. However, it is rarely a good idea to intentionally limit the market exposure of a property – especially the most valuable asset a client is likely to own. We believe Edina Realty routinely engages in the practice of pocket listings and we highly recommend that you avoid this practice. Here is a short article about pocket listings: Pocket Listings.

3. Closing Services Notice is incomplete and self-serving (in our opinion). Title companies investigate and examine title and make extremely important closing decisions. They provide consumers with an incredibly important safeguard service. Edina Realty wants you to use their title company and persuades many people to pick their title company by causing them inconvenience if they do not. Instead of providing their clients with a list of impartial title firms and their fees, Edina Realty provides their clients with a choice that puts the onus on the client to go figure out how to compare title firms: pick Edina Title or go find your own title companies the only two choices. Does Edina Title rubber stamp deals so that Edina Realty can collect their commission? Is Edina Title looking the other way and saddling their clients with title defects? Are they capturing their clients and charging them more than other title companies? We do not know, but the conflict exists and we suggest that you do an internet search to compare Minnesota title companies and find one that is independent of affiliations. 

4.  Edina Realty Home Warranties are being sold to clients in the listing contract. Home warranty products are often cited as generating more consumer complaints than any other service product on Angies List and other respected resources. Yet Edina Realty pushes them in its listing contract because they collect a portion of the fee. Here are links to two stories in Angies List about home warranties: Why Home Warranties are No Guarantee and Home Warranties.

5.  Edina Realty claims a copyright on their clients’ listing data. By taking a copyright on your data this gives Edina Realty the right to sue third party websites that include your listing information on their websites. We believe this is wrong and that Edina Realty should be doing everything they can to make sure your listing data is widely marketed regardless if they are to get a double commission. Here is an older clause that we saw in their contract. 

6.  A mandatory Arbitration Clause designed to eliminate class action lawsuits and binds clients to arbitration even in claims of fraud. Extremely harmful to consumers:

7. Junk Fees.  Many real estate brokerages started charging junk fees on top of their enormous real estate commissions (we recommend to not agree to pay these). In comparison these fees don’t seem like much. But an extra $400 or more is a lot of money and Edina Realty charges both their buyer and seller clients approximately this much.


Thank you Minnesota State Bar Association for making your Forms Free to the Public

The Minnesota State Bar Association just made their purchase agreement forms available free to the public.

Minnesota Standard Residential Purchase Agreement Forms Now Available to the Public (click here to access) The Minnesota State Bar Association (“MSBA”) just made their Minnesota purchase agreement forms available free to the public. Unlike the local Minnesota Realtor Association forms which are cluttered with self-serving provisions, the MSBA forms are well balanced and thorough. We recommend that you use an attorney to draft it though (it is your house at stake if you do it wrong).

The Minnesota Association of Realtors purchase agreement forms are exclusively available to Realtors and are typically the only form Minnesota consumers ever see (and they are not available to the public). For several decades there has existed a better set of purchase agreement forms that offer better protections to consumers. The Minnesota State Bar Association just made those forms available free to the Minnesota public. Next time you are buying or selling a house, insist that these forms be used. It is likely illegal and a violation of licensing laws for a Realtor to refuse to accept an offer on these forms.


CAARE Welcomes NAILTA to Minnesota


A title company investigates and examines title and renders important title and closing decisions. Those processes should never be influenced by conflicts of interests like those that exist with builders and Realtors. When the payment of a large commission or profit is contingent upon a transaction closing do you really want your Realtor or builder involved in the title process?

The National Association of Independent Land Title Agents (NAILTA click here) is a trade association dedicated to preserving the integrity of the most important services of the entire transaction: the conducting of the closing and the examination and insurance of the title. CAARE welcomes NAILTA to Minnesota and wishes them luck in starting a Minnesota Chapter.

CAARE advises that you should NEVER use an affiliated title company in real estate, especially if that arrangement is between your title company and your agent, broker, lender or builder. Not only do these affiliated business arrangements eliminate competition and lead to higher prices for everyone, these arrangements also sacrifice the most important safeguards in the real estate transaction. These arrangements are often “sold” to clients as “One Stop Shopping.”

You are not “rocking the boat” by insisting on selecting your own independent title firm. In fact, you are taking away the power of your real estate practitioner to interfere with your transaction and are typically creating a safer closing environment.  

Affiliations in the title lead to price gouging through inappropriate means:

  • Practitioners direct their clients into over-priced and conflicted service providers.
  • Practitioners can eliminate competition among title companies by directing business to their in-house firm.
  • Practitioners cease comparative shopping on behalf of their clients which results in higher prices and poorer title coverage for consumers.
  • Practitioners influence title insurance underwriters to increase title insurance premiums, which results in higher prices.

Affiliations in title lead to higher risk transactions and more liability for home buyers

  • Affiliated title companies are encouraged to close riskier transactions in order to preserve Realtor commissions and builder profits.
  • Affiliated title companies may take their orders from practitioners who have a financial stake in the outcome of the transaction.  

Kickbacks in exchange for referrals of title business have become far more subtle and untraceable.

  • Managers who set commission splits for Realtors are often paid large bonuses based upon their capture rate of title business.
  • Managers who are supposed to be supervising agents, are often pressuring them financially to steer money into their in-house firms.
  • Realtors who pay office rent may receive large discounts on their rent in exchange for directing clients into over-priced in-house title firms.
  • Realtors may have their commission checks paid more quickly if they use the in-house title firm.
  • Realtors may receive higher commission splits if they use in-house title firms.  You are paying for that extra commission.


Tip: Ask your Realtor if the title company is affiliated with any other real estate service providers like mortgage, brokerage, construction, development, home inspection, etc….

Tip: Realtors are not trained or qualified to advise you regarding title issues. Always hire an independent attorney (one not affiliated with the Realtor or a title company) to review your documents well in advance of closing.

Tip: check with your local regulatory authority to determine that your title company is properly licensed and if they have any licensing complaints.

Tip: Check with the Better Business Bureau to determine if your title company has any complaints.

Tip: Determining marketability or insurability of title requires in-depth knowledge of real estate law. Make sure your title company has an attorney on staff. Tip: Check to see if your title company is a member of NAILTA.

Tip: CAARE’s Executive Director spoke before Congress regarding corruption in the title insurance industry.  Click here to read his testimony.

Tip: It is a violation of federal law (click here) for a title company to give anything of value in exchange for referrals of business.

Tip: CAARE has a webpage dedicated to business affiliations in the residential real estate.  Click here to access it.


Dual Agency Plagues Boston Luxury Homebuyers and Sellers


Luxury home buyers and sellers are certainly not immune to the problems of dual agency. Commissions on luxury homes often exceed $50,000 so why would anyone give up such important services as assistance with negotiating a price or negotiating terms of the transaction? When homebuyers use the listing agent to buy their homes not only are they giving up their right to representation on a million dollar asset, they are rewarding the agent for this betrayal with a double commission.

Here is a sampling from the blog post and a link to it:

“Looking at single family homes sold over $900,000 in one community, we were stunned to discover that 70% of one well-known listing agent’s sales were in-house; and in more than one in four sales, the MLS listed her as both listing agent and sales agent.” Click here for a link to the story. The story first appeared in the Boston Globe (the story is no longer online).

Maryland and Designated Agency

Today CAARE wrote a letter to the Senators considering a licensing law change to the Maryland Real Estate Brokers Act.   To see our letter click here.

Maryland’s current statutory scheme is contradictory in that it embraces the notion that designated agency can exist in a two tiered licensing scheme where the brokers are responsible for supervising their salespeople.  Here is an excerpt from our letter:

“Section 17-530(d)(1)(v)1]  of the Act allows salespersons to exceed the limits of the broker’s legal relationship with the client – an impossible result.  This part of the Act addresses the situation where dual agency occurs and the broker is legally prohibited from negotiating to the detriment or benefit of either party.  However, this section of the Act is incorrectly constructed in that it actually allows the salesperson, in a dual agency situation, to do exactly what the broker is prohibited from doing – negotiating price and terms.  How can a sub-agent of the broker (the salesperson) be allowed to negotiate on behalf of the broker’s client, when the broker is legally prohibited from doing so?   They cannot. 

How can the broker fulfil their licensing responsibility to supervise their salespeople when their salespeople are engaging in acts for which the broker is prohibited?   If the salesperson consults their broker about the legality of certain negotiating terms, how can the broker advise their salespeople when doing so will violate the Act.  The current statutory construction is logically flawed and needs to be revised. 

Although we understand how profitable dual agency is for large brokerages in that they get to keep a double commission, at some point we must balance the integrity of the licensing scheme and consumers’ interests.  The current Act does not do that.”


1] §17-530 (d)(1)(v) Establishes that “An intra-company agent representing the seller or buyer may provide the same services to the client as an exclusive agent for the sell or buyer, including advising the clients to price and negotiations strategy, provided that the intra-company agent has made the appropriate disclosure to the client and the client has consented, as required by this section, to dual agency representation.”


Minnesota Attorney General’s Office is Misleading Consumers

The Minnesota Attorney General’s Office (“AG”) has got it all wrong on the section of their webpage dedicated to housing.  And apparently, they don’t care as we’ve been trying to call their attention to this problem for over two months. In these difficult times when the housing industry has financially wiped out so many consumers, how is it possible that the AG’s office could be so apathetic about the information they provide to the consumers they’re supposed to be representing.

From dual agency to title insurance, apparently the AG in Minnesota doesn’t understand the consumer housing industry and has no qualms about spreading mis-information to Minnesota consumers.   

For example, shopping and comparing title insurance is a complex and often intimidating process for those consumers who attempt it.  However, if consumers rely upon the AG’s office for advice in this matter, they can expect to over pay for their title insurance.

Here’s mis-information from two different sections on title insurance quoted directly from the Minnesota AG’s website:

A savings on the cost of title insurance, when the buyer uses the same title company that the previous owner used. Because the company is “re-issuing” the insurance, it can offer a lower rate.” (NOTE: The Attorney General’s office has removed this miss-information from their book. However, much of their handbook is still out of date and contains other bad information).

Asking Can Save You $ (click to see page) Be sure to ask for a re-issue credit on your title insurance. If the seller bought an owner’s title insurance policy within the past few years, the same title company the seller used may issue you a new policy without redoing all the paper work. This can save you a lot of money!” (NOTE: The Attorney General’s office has removed this miss-information from their book. However, much of their handbook is still out of date and contains other bad information).

This is important because reissue credits can often save consumers as much or more than $500 on title insurance.   The truth is that reissue credits are available at ANY title company that offers them, not just the own the previous owner used as the AG’s site proclaims.  In fact, today one very large title underwriter, Old Republic National Title, eliminated reissue credits from their rate filing on new purchase transactions, so if a consumer follows this advice they could easily be out several hundred dollars if they select a title company that uses that underwriter, like Burnet Title or Edina Realty Title.  And the discount has nothing to do with “reissuing” the title insurance, it is a discount offered because of the reduction in liability exposure.  Essentially, the new title insurer can “piggyback” upon the coverage offered in the previous policy.

But there’s more…

Reading through the AG’s website on “housing” is almost a lesson on how NOT to buy or sell a house.  Dual agency is explained in impossible to understand and incorrect terms.  The forms cited are all from the Realtor trade association perpetuating the myth that the Realtor forms are the “standard forms.”  We could go on and on…

Here’s the short list of problems with the AG’s website in regards to their “Home Buyer’s Handbook” starting with Section Four:

  1. “Visit Open Houses.”  Very bad advice.  Visiting open houses almost ensures that a commission dispute will arise if you later hire your own agent.   Open houses are traps that lead to dual agency and the listing broker “hogging” the entire commission.   Avoid Realtor open houses.  
  2. “You can also view listings online at:…”   Hang on a minute, is a commercial entity – from their website:  “ is independently owned and operated and is not affiliated with any of the over 900 local MLS systems. We offer the public access to multiple listings throughout the United States by providing advertising services for real estate agents and real estate related industries.”  Since when does the AG’s office offer free advertising to for profit firms?  If you want to search for listings, use a site such as or that accepts listings from both Realtors and home sellers.
  3. “Understanding the Purchase Agreement.”  Not one mention of using an attorney to draft this form.  Rather, they instruct the buyer to “read the purchase agreement thoroughly.”   This is the most important document in the whole transaction and contains numerous complex legal terms –  HIRE AN ATTORNEY.  And don’t wait until after your Realtor has drafted it – it’s too late then.
  4. “Arbitration.”  There is no mention of the extraordinarily high filing fees if you want to file an arbitration which can often be in excess of $600.   In addition, there is no mention of the boilerplate arbitration clauses that are often contained in listing and buyer representation contracts.
  5. “Title Insurance.”   No mention of the difference in costs or the very large difference in insurance coverage offered by different types of policies.
  6. “Dual agency…The term refers to an agent representing a buyer in an offer on a house when that agent actually owes a duty to the seller of the house.” SERIOUSLY?  Dual agency is an impossible conflict of interest where the agent owes duties to BOTH parties.  This section goes on to discuss “equal” representation and other made up terms that confused even us:  “Unfortunately, not agreeing to dual agency may prevent you from buying a home listed by your agent’s company. You can cancel an agreement to dual agency for a particular property, if you choose.”  None of this is accurate.
  7.  “Business Relationship Disclosure.”   Poorly written, lacking in logic and completely inaccurate.  “Your agent may receive a referral fee or other benefits if he or she directs your business to these companies. Agents can be paid according to the number of referrals they make to an affiliated company.”  Referral fees are ILLEGAL!
  8. “Sample Purchase Agreement.”  It’s an out of date Realtor form on their site…
  9. “Appendix E: Explanation of Closing Costs.”   It is possible that 50% of their quoted fees are completely out of date or inappropriate.  For example, most title companies have bundled all their fees together in an attempt to comply with new RESPA rules.
  10. “HUD-1 Settlement Statement.”  Again an outdated form.

We give Minnesota Attorney General’s website an “F” for causing consumers who rely upon a trusted resource to be terribly misled about the housing industries.