Real Estate Information

Howard A. Birmiel
Attorney at Law
9314 - C Old Keene Mill Road
Burke, Virginia 22015
Phone: (703) 451-4506
Fax: (703) 455-9278
howard@birmiel.com

A Consumer's Guide to Selecting a Settlement Provider for a Real Estate Transaction

Don't be steered to a "connected" settlement service for the wrong reasons, and you won't pay more for less…

Unfortunately the interests of buyers and sellers in real estate transactions have been forgotten by some real estate professionals in the current market for real estate settlement services because a few of them or their companies are more interested in deriving a profit from their referrals. As a result, true competition between settlement service providers has been stifled. The consumer who knows the least and needs independent legal expertise the most is the one likely to be directed for self-profit motives labeled "one-stop shopping."

Remember that the consumer has the right under Virginia law to select a settlement agent, and is not required to accept the choice of the lender or the title insurer provided by the real estate professional, or his/her company. In Northern Virginia, the consumer should question any attempt to direct or "steer" his or her settlement services. While after July 1, 1999 almost all affiliations between the referring real estate professional and a settlement or title company are required to be disclosed to the consumer begin referred, disclosures have proven to be ineffective; either they are not visible among the morass of disclosure and contract papers, or simply not given at all when the referral is made. Some questions to ask your referring real estate professional:

1. Do you or your real estate company have an ownership interest in the settlement provider you are directing us to? Do you or your company receive dividends from the settlement provider? If so, you, the buyer and seller in Northern Virginia are likely paying more than in Mr. Birmiel's law office for collective settlement services, including title insurance and legal representation. The market bears this out. Ask for a choice of providers, including those that are independent and must excel to compete. Know that illusory discounts are often made up elsewhere.

2. Will an independent real estate attorney able to give legal advice handle this largest transaction of my life? If you even see an attorney in these "connected" transactions, such attorneys are likely paid by title companies affiliated with real estate professionals, and cannot give legal advice in Virginia, without a multitude of inherent conflicts.

3. What title insurance rates am I being charged, and what other fees will be added at the settlement table? Rates charged by title underwriters often differ substantially. Higher rates are often charged by title agencies affiliated with referring entities; the now captive consumer knows nothing to the contrary, and the profits from lending and title insurance have to be split several ways. Discounts on "one" service fee to lure the consumer are often illusory in the scheme of several additional fees which are charged and which total substantially more.

If you are contemplating the purchases or sale of real estate, don’t risk being taken advantage of. Contact us to schedule an appointment to learn how our independent advice can help protect you.