Who gets to pick the title company that will issue the owner policy of title (TEXAS)

Legal

Ask Texas REALTOR® This was in the latest issue - Good information

Who gets to pick the title company that will issue the owner policy of title

insurance?

Logical arguments can be made that support either a seller or buyer picking

the title company. A seller may feel he should be the one to pick the title

company where the applicable provision of the TREC contract shows the

cost of the owner policy to be a seller's expense. A buyer may feel that he

should pick the title company because he will actually be the insured party

in the owner policy.

The only law governing this issue is under the Real Estate Settlement and

Procedures Act (RESPA). The HUD Web site states, "Section 9 of RESPA

prohibits a seller from requiring the home buyer to use a particular title

insurance company, either directly or indirectly, as a condition of sale.

Buyers may sue a seller who violates this provision for an amount equal to

three times all charges made for the title insurance."

While REALTORS® often have a favorite title company or closer they prefer

to use, Texas REALTORS® must remember that their primary obligation

is to put the client's interest fi rst. The ultimate decision about the choice of

the title company should be made by an informed client.