He explained that banks typically pay for 50 percent of the escrow and 100 percent of title. If consumers select their own company they must pay for two title policies and an escrow fee, he said.
Despite this, brokers like Berg see the positives in working with the same title and escrow companies that are local and not a bank’s choice.
"It makes my life easier to know I trust the person that will help with the transaction," she said. "When you get their (the banks’) title and escrow, they’re often out of state, which doesn’t make for a smooth transaction."
While the bank-recommended escrow and title companies can sometimes be cheaper than a buyer’s choice, the reverse could also be true.
"By giving up the ability to choose the service providers, you’re writing a blank check," Berg said.
Marquez concurred that the escrow and title companies used by banks are often very busy and/or out of town.
"I’m all for banks going to locally run or more improved escrow companies. If the banks, as listing agents, gave us a chance to look elsewhere, we (buyer agents) would," he said.
"We want to see (the file) go to the most competent escrow company. Our concern is to have the best people handle the file, not necessarily the cheapest."
Looking ahead, Marquez said he sees AB 957 having more of an impact "as we head into a more balanced environment with more inventory … if that ever happens."
Any seller who violates AB 957 shall be liable to a buyer in an amount equal to three times all charges made for the title insurance or escrow service. In addition, any person who violates this section shall be deemed to have violated his or her license law, and shall be subject to discipline by his or her licensing entity.
The law is written to extend until Jan. 1, 2015.
Erik Pisor is a freelance writer in California.
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