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The Hidden Cost of Canceled Title Files
“This year, I watched nearly one out of every five files walk out the door without closing. Twenty percent. Gone. And every time, my agency ate the costs—HOA payoffs, courier runs, deed prep, software fees. No policy premium coming in, just bills piling up.”
-Anonymous Title Think Tank Member
If you’ve ever looked at a cancellation and thought, “Well, there goes another few hundred dollars I’ll never see again,” you’re not alone. Other agents in our Title Think Tank Mastermind and communities admitted their own cancellation rates—some 5%, some 10%, even 15% and more—and all of them said the same thing: it hurts.
Heather summed up what many of us have felt:
“We seem to be the only industry that’s okay getting screwed out of pocket expenses. Mind-blowing to me. I’ve been in real estate since 1992 and it never changes.”
And she’s right. Realtors lose their time and marketing dollars when a deal cancels. Lenders lose their processing effort. But that doesn’t make it right for us—or them. Why should anyone in this industry be expected to front-load all the work for free, just hoping the stars align at closing?
Interestingly, some Realtors are wising up. Many now require sellers to cover staging or professional photography costs upfront. Others shift vendor fees directly onto their clients, so they’re not left holding the bag. That sparked a question in our group: If they can do it, why can’t title agents?
Of course, the fear bubbled up fast:
What if we lose business to competitors who don’t charge?
What if Realtors push back and send deals elsewhere?
Those are valid worries. But here’s where the power of the mastermind shows up. Instead of leaving each other stuck in fear, the group traded real solutions—policies that protect your agency’s bottom line without alienating referral partners or clients.
That’s what makes the Title Think Tank different. It’s not just a gripe session. It’s a problem-solving lab where scrappy title pros swap what’s working in the trenches. Out of that conversation came strategies that were practical, client-friendly, and—honestly—pretty empowering.
Because at the end of the day, canceled files aren’t just paperwork gone bad. They’re a business model risk. And unless we start treating them that way, we’ll keep bleeding money and wondering why the margins feel so thin.
🦊 Join in the Title Think Tank conversation yourself:
📅 November 20th | ⏰ 10:00am EST/7:00am PST |🎥 Get the Link
Crowd-Sourced Solutions to Title Cancelations
From talking to industry insiders, I’ve collected so many amazing tactics to reduce cancelation rates, manage the fall out from the ones that do cancel, and the rules and regulations around cancelation fees that I’ve literally filled a short book. But today I’m going to share 3 of my favorite solutions with you:
Tip 1: Timing is Everything
The group quickly pointed out that sometimes the biggest mistake isn’t the cancellation itself—it’s when the order is being placed.
I put it bluntly:
“If your referral partners are dropping orders without pre-qualifying finances and resolving obvious issues—you’re guaranteeing wasted work. Analyze your canceled files to look for patterns - who’s transactions cancel the most often, at what point in the transaction are they cancelling, why are they cancelling? Then sit down with the biggest cancelation culprits and discuss what can be done to clear conditions earlier, place orders later or clearly communicate when key milestones have been passed.”
Diana stated that, “We don’t have much refi business. Ours are cancelling due to inspections.” Whereas Rodney has found that “refis and cash outs are notorious for high cancellation rates.”
Tip 2: Charge an Upfront Fee
Nancy Gusman, President of Brickhouse Consulting stated that many agencies have quietly adopted upfront open-file fees—a flat $250–$300—collected just like an appraisal fee. If the deal closes, credit it back on the settlement statement. If not, at least you’ve covered your third-party costs.
It’s important to note that rules and regulations regarding the legality of charging a cancelation fee vary from state to state and there can be a difference between an upfront fee and a cancelation fee. But don’t worry, I have you covered. I researched the regulations for all 50 states and compiled the list in my new book:
🔓Paid Members you have access to the state-by-state guide here!
Upfront Fee vs Cancelation Fee
There can be a very important distinction between an up-front fee and a cancelation fee when it comes to the law, even though both may help you achieve the same end. Let’s look at those differences:
The Name: Sometimes it is a simple as what you choose to call it and how you explain it to your customers. Calling it a “Title Search Fee” to mimic lenders with their “Appraisal Fee” will be better than calling it a cancelation fee. Though if you are in an all-inclusive rate state like Pennsylvania, you had better make sure to include in your fine print that the fee will be credited at closing toward the cost of the insurance.
The Purpose of the Reimbursement: A cancelation fee might be reimbursing you for out of pocket expenses but it might also be covering some your expended time. However an upfront fee should be set to cover specific out-of-pocket expenses such as title searches, HOA estoppel letters, and certifications. Being paid up front for labor not yet provided could violate laws and will largely be seen as distasteful at the very least.
Tip 3: Require a Signed Closing Cost/Cancelation Policy Acknowledgement
When I ran my title agency, I required all buyers and sellers to sign a Closing Cost/Cancelation Policy Acknowledgement as soon as the order for title was placed. This document explained:
Expected closing costs
Optional fees (e.g., overnight/wire fees, stop payment fees)
Cancelation fees
This wasn’t about scaring clients—it was about setting expectations early. When clients understand the financial structure up front, they’re less likely to push back later.
📎 Want a copy of the exact form I used? Head to Appendix B in the new book to grab a copy of my Cancelation Policy Acknowledgement (including a QR code to a digital copy you can edit or copy/paste). | Kindle | Print |
Not All Business is Good Business
Teri suggested that generally you’ll have multiple repeat offenders for high cancelation rates. She wisely stated, “Not all business is good business.”
The community did a great job brainstorming and sharing a whole list of tried and true tips and tricks that they’re actively using to mitigate loses. It’s not always about adding or removing fees; it’s about shifting workflows, negotiating contracts, and being proactive about reducing your loses, so you’re not running title on deals that were never going to make it past inspection or financial qualifications and you’ve protected yourself against the inevitable.
If you’d like to get your hands on all of the valuable insights and learn exactly what industry insiders are doing to ensure profitability, then grab our latest easy kit “How I Stopped Bleeding Money: Title Agent’s Guide to Minimizing Losses from Canceled Deals”
Inside, you’ll discover:
👻 Nightmares Brought to Life in a scary because it could be true entertaining story.
📝Protect yourself with smart policies with a real-world playbook to minimize cancelation losses from agents in the trenches.
🗺️ Comprehensive Compliance Guide that includes a state-by-state breakdown of what’s actually legal when it comes to cancellation fees.
📑 Ready-to-use templates: Sample Closing Cost & Cancellation Policy Acknowledgement form pulled right from my own agency’s files.
Canceled files are inevitable. But losing money on them doesn’t have to be.
By rethinking order timing, shifting certain costs to the seller, and other time tested tactics, title agents can stop the cash drain and keep clients feeling respected. If you’d like to get the inside scoop without waiting for me to write another book or easy kit, then join us on our monthly Zoom call in Title Think Tank.
🔓Paid members, your inbox is about to get all the good stuff. Tomorrow you’ll get the complete rundown of every tip, trick, and workflow tweak that is inside the new book!
Stay Wicked,
Cheryl
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