Homebuying: Worse than a prostate exam...
... by Dr. Edward Scissorshands
I'm headed toward close on a home in the DC area. Yes, it cost too much. No, it's not so fancy. (Still got the original 1965 tongue and groove pine paneling in the rumpus room.) But it is very well located for the family's respective commutes, is right on a bike trail and park network (important for us runner/biker types) and has enough space to accomodate our soon-to-be-one-larger family.
Finally, payments for us look like they'll be about equal to after-tax rent on a comparable home. (But we've never actually seen a comparable home that has all the stuff we want, like this one.) Let us not speak of the down payment, please. I still get queasy at the thought of writing a check to drain those years worth of savings...
Once things are finished up (closing and the stork are scheduled to arrive within a week of each other) I'll definitely have to blog about the horrors of this process. Currently, I'm mired in dealing with what I think is the biggest RE scam left standing: Title Insurance.
Read this GAO report, for a primer on just how bad this industry is. (And marvel that nothing's been done, except in Iowa, where they ran private insurers out of town and run their own program for a fraction of the cost.)
Title insurance differs from other types of insurance in key ways.
First, in most property and casualty lines, losses incurred by the
underwriter account for most of the premium. For example, property-
casualty insurers' losses and loss adjustment expenses accounted for
approximately 73 percent of written premiums in 2005.[Footnote 9] In
contrast, losses and loss adjustment expenses incurred by title
insurers as a whole were approximately 5 percent of the total premiums
written, while the amount paid to or retained by agents (primarily for
work related to title searches and examinations and for commissions)
was approximately 70 percent.