Who Selects the
Title Company? Seller or Buyer
This is the part#6 of a series of
documents regarding Title Insurance.
The real answer is none of the clients. Almost all
the time sellers and buyers don’t know and don’t care about who the
title company should be. As we stated before, at least in state of
Texas, all pricings for Title companies are regulated and fixed by
state. It means that, the cost of titles from two different title
companies for the same house would exactly be the same.
The selection of the title company, in a real
estate transaction, is negotiable between sellers and buyers. Per
statement above, except few cases such as foreclosed REO or HUD, the
seller and buyer don’t care about which title company take care of the
transaction, as long as they do their job right. But, this becomes
issues between seller’s agent and buyer’s agent mainly because of their
relationships and previous experiences with their preferred title
Unfortunately, in some cases, the selection of
title companies becomes so hot between agents that could break the deal.
Who Pays for Title Insurance Policies?
Though it is not the law, but typically seller pays
for homeowner title insurance policies and buyers pay Lender title
insurance policies. In some case, based on the negotiation in the
contract, buyer may have to pay for the title insurance policies, this
is not the norm.
Laws on Who Can Select Title Company
There are a few laws regarding who can select the
title company when the government assistance mortgage involved such as
FHA. These are as follow:
Section 9 of RESPA (12 U.S.C. $2608) and Regulation
X $3500.16 states that:
No seller of property that will be purchased with the assistance
of a federally related mortgage loan shall require directly or
indirectly, as a condition to selling the Property, that title insurance
covering the property be purchased by the buyer from any particular
Any seller who violates the provisions of subsection (a) of this
section shall be liable to the buyer in an amount equal to three times
all charges made for such title insurance.