A Traverse City real estate professional who owns part of a title company explains Michigan's fixed-rate title fees and why affiliated business arrangements don't raise costs for clients. Large brokerage offices have higher overhead, but title fees themselves stay the same.
When real estate agents own title companies or parts of title companies, they are required to disclose that to their clients. It's called an Affiliated Business Arrangement Disclosure. And why is this important? Well, I actually own part of a title company that uses Attorney's Title or ATA Title. It's located in this great big office building. That faces beautiful West Bay in Traverse City. An important note to distinguish, if you've been watching my videos, is I talked about how real estate offices are becoming a little obsolete and who's paying for those huge office buildings that bring very little value to, to the clients involved in real estate. It's a little bit different with title companies. First of all, clients aren't really paying for the office space. This is a great, beautiful office building looking out over West Bay and Traverse City, but Michigan is what's called a fixed rate state. So in the state of Michigan, all title companies charge the very same amount, okay? So it doesn't matter whether there's an affiliated business or arrangement like I have Or, you know, Caldwell Banker has one with Woodland Title. It is a regular thing that there's a little bit— there can be financial interest that either the brokerage or the agent themselves have in a title company, but there's no extra cost to clients as a result of that. But we are required by law to disclose that. You know, their disclosures in real estate are a huge thing, whether that's an agency disclosure disclosing the fact that I'm acting as someone's agent, whether that's a seller's disclosure. Sellers in Michigan are required, whether they use an agent or not, all sellers of real estate are required to fill out a seller's disclosure. Just because this is a beautiful office building looking over West Bay doesn't mean that you as a client are paying any more for title services, uh, as a result of that. As opposed to huge office buildings in downtown Traverse City, You know, you are probably paying a little bit more for your real estate services to support what I think is an obsolete business model with huge real estate offices. Title companies, you know, that like I said, fixed rate state, so regardless of whether they have a terrible office building or a big beautiful one overlooking the bay, the rates are the same to you.
