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Escrow Agent: buyer's choice before contract is signed and sumbitted for builder's approval.

Builder's sales rep is discouraging me from using an escrow agent of my choice since i'd be financing through builders finance company. Any Ideas???

Escrow. The transaction contemplated by the Contract will be accommodated through an escrow (the "Escrow")
established with the entity appointed as escrow agent on the Selection Order (the "Escrow Agent"). Buyer acknowledges
that Buyer has the right (in Buyer's sole discretion), at the time Buyer enters into this Agreement, to designate the title
insurance company, title agency, and/or law firm, as applicable, to act as the escrow agent under the Contract so long as
such entity is experienced in performing and qualified to perform the duties of Escrow Agent under the Contract and such
entity has an office open during customary business hours in the same municipality as the "builder's office designated at the
end of this Agreement. Buyer does not have the right to change the identity of the Escrow Agent identified on the Selection
Order once this Agreement has been accepted by "Builder's name".
  • October 18 2012 - Dallas
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Answers (8)

Best Answer

Honestly, all of the builders in this area use very good title and escrow services.  It is much simpler to use their title company, and since title insurance is regulated by the state they can't charge you any more than any other title company can.  They can however, charge different fees for other services, but those shouldn't differ by more than a couple of hundred bucks. If the couple of hundred bucks is important to you ask their title company to match the quotes you have received elsewhere.  I vote for using the builders preferred escrow services - every time.
  • October 18 2012
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Thanks everyone. I'll b asking for a breakdown and compare it against other mortgage companies on fees and such. I have already asked them to match on what other banks charge.
  • October 22 2012
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I totally in agreement with Kim. Go with the Title company that the builder hhas. They are the third party that you can really trust. Most and all title company offers similiar service. It really doesnt make any difference.
  • October 22 2012
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The title policy amount itself will be the same no matter who you use but builders have much much higher fees hidden charged through the title company.  I've seen it as high as 2K above what other companies charge.

Get an exact breakdown from the builder in writing so you don't get a shock price.

I also hope that you negotiated for the builder to pay for that title policy.

Naima
  • October 18 2012
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A builder's lender and title company are there to take care of the builder...you will always be a secondary concern.  They are discouraging you from using another title company because the builder receives financial and other benefits from using their captive title company...something they don't receive if you choose your own title company. 

Different title companies have different types closing documents and not all closing documents are created equal.  Do your homework as it's been my experience that the builder's title company will not change their documents should you have a problem with them. 
  • October 18 2012
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Thanks Pat.
  • October 18 2012
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If you had used a Buyer's Agent to represent you in your purchase of a new home to be constructed by  a Builder, you would not be asking this question.  We recently represented a couple as their Buyers' Agents.  The couple decided they wanted to build a new home.  When reviewing the Builder's Construction Agreement, we suggested an Escrow Agent/Title Company that both our clients and the Builder agreed upon.
  • October 18 2012
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Thanks Kim.
  • October 18 2012
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