I don't know of many other businesses that will do a job, then decide if they will be paid for the work.   What does it matter if it "closes" or not?   Did you not do the search for them?

I would tell them to either charge the borrower a non-refundable search fee at the time of application for the loan, or have the person ordering the search stand the cost as a part of their cost of doing business.  I give at church, but I won't be walked on by another business.

George