Who chooses the title insurance company is a great question. Section 9 of the Real Estate Settlement Procedures Act (RESPA) has made who chooses the title insurance company pretty clear.
Section 9 of RESPA (12 U.S.C. §2608) states that:
Section 9 of RESPA (12 U.S.C. §2608) states that:
(a) 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 title company.
(b) 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.
Buyer Chooses Title Insurance
The choice of which title insurance company to use when purchasing a home with a federally insured loan is the buyers.
Seller Chooses Title Insurance
In the event that the seller pays 100% of all title insurance fees including any costs that would normally be paid by the buyer. The seller may choose the title insurance company.
Realtor Chooses Title Insurance
Many Realtors think they have a right to choose a title insurance company in which they like to work with. Title insurance company choice is NEVER the Realtors choice unless they are the owner and paying 100% of the fees.
