New York, as it often does, occupies the most expensive spot in Bankrate's annual closing costs survey.
Arkansas had the lowest closing costs in this year's survey.
Texas is the second-most expensive state for closing costs. It often is. New York and Texas usually find themselves in the top two, for a number of reasons. The state of New York levies some taxes directly onto lenders, and those costs are passed along. And in New York, lawyers perform closings, and lawyers are expensive. Outside the northeast, closings tend to be done by title or escrow agents, who charge less than lawyers for their time.
In Texas, title insurance is expensive. Texas has what are called "promulgated" rates for title insurance premiums and title services. "Promulgated" means that those fees are set by state regulators, and title insurance companies and title service providers have to charge that rate -- no more, and no less.
Yes, you read that right. In Texas, it is illegal to charge less than the promulgated rate for title insurance. It is flatly illegal for title companies to compete on price. Texans like to think of themselves as rugged capitalists, but comfy socialism thrives in the Texas title insurance industry. The title insurance companies have one of the strongest lobbies in Austin.
I wish the cost of title insurance were an issue in this year's elections for governor and lieutenant governor. Instead of vowing to cut title insurance costs for Texans by requiring the insurance companies to compete, the candidates are squabbling about border security, which is a federal issue.
You would think that Gov. Rick Perry or challenger Bill White would make expensive title insurance a campaign issue. I wonder why they don't?
OK, off the soap box. Bankrate's annual closing cost study is a multifaceted affair. There's the gallery of the five most expensive states, the gallery of the five least expensive states, the list of states from most to least expensive, and charts of fee averages within states. That last one, the fee charts for each state, is a little tricky; make sure to read the explanatory paragraph.