Forms you may be asked to sign that are not necessary for submitting your offer.

Be careful when plowing through the stack of papers you'll be asked to sign, either upon selecting your real estate agent or when preparing to make an offer. If you sign without understanding what's being asked of you, you may accidentally waive your right to shop around for title and settlement services. You could be committing yourself to the in-house title insurance/settlement services provider. Passing up the opportunity to shop around could cost you up to $700 or more in additional fees.

Here are some of the typical documents you may be asked to sign.

Affiliated Business Disclosures

If your real estate broker, agent, or lender participate in an Affiliated Business Arrangement (a profit sharing agreement with third party real estate service providers), they are required by federal law to disclose it to you.

See the sample Affiliated Business Disclosure below pertaining to Title Insurance and Settlement Services. Section A reveals who they are affiliated with and what their ownership interest is. Section B refers to the cost of the title insurance policy and related services. If you want to shop around before committing to anything, be sure to read closely. In this example disclosure, the checkbox in Section C is more than just your acknowledgement that you received the disclosure, it could also be your authorization for your broker to move ahead with your title insurance.

If you plan to shop around and you're asked to sign such a form, be polite and upfront about your intentions. Let them know you'll be comparing offers and invite them to provide you with a complete and accurate quote.

TIP: As the market contracts, real estate agents and lenders may press harder to earn your title and settlement services business. We suggest you start shopping around while you're still casually looking at houses so that you're not under any added pressure when it's time to make an offer.

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Standard vs Enhanced Title Insurance Policy

It's also worth noting, section B, that this particular real estate brokerage quotes the Enhanced Home Owner's Title Insurance Policy by default. While the enhanced coverage might make sense for a small subset of buyers, based on the characteristics of their individual property, the enhanced coverage may not be worth the additional expense for the average buyer.

TIP: When trying to decide which coverage is right for you, here are a few things to keep in mind:

  1. The enhanced policy costs 10% more than the standard policy
  2. An enhanced policy is subject to limitations and deductibles
  3. Your mortgage lenders only requires standard coverage
  4. Approximately 85% of the cost differential goes to the person or agency selling you the policy.

We explain standard vs enhanced title policies coverage further on our blog. If after considering both options you feel that the enhanced policy isn’t necessary for your situation, don’t buy it.

Agreement of Sale Section 14: Titles, Surveys, & Costs

Don't be frazzled by the "order within 7 days" language in the Pennsylvania Association of Realtors (PAR) standard Agreement of Sale. Section 14 implies that the buyer has a limited window of time to order a “Comprehensive Title Report” from a reputable title company and upon receipt, deliver a copy to the seller.

Don't panic. If you exceed the 7 days, nothing happens. Your offer still stands, the deal doesn't fall apart, and your agent still doesn't have the right to order it on your behalf without your consent. Especially if you've expressed your desire to shop around before deciding.

TIP: A few things to keep in mind about the timing of your title insurance.

  1. To order your title insurance, you'll first need a signed Agreement of Sale.
  2. Don't wait until the last minute. We recommend you give your title company as much time as possible to conduct the title search and issue the title commitment.
  3. The average title search takes 5-7 business days and most title companies will wait until all inspections have been completed before starting the search.
  4. If you’re buying the property with cash, you’re under no obligation to obtain a title commitment or title insurance, although we strongly advise against this.
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View the full Title, Surveys & Costs section section in a standard agreement of sale.