This question came to me after a settlement that was a little rougher than it needed to be. Here in Virginia, the buyer selects the settlement company since the buyer pays for the title insurance, so the Buyer's Agent (who is with a national brand) put into the contract that they would use their in-house / affiliated settlement company. Along with the offer, we received a generic disclaimer form acknowledging the affiliation between the companies and that some individual agents may a hold direct ownership position/share of the settlement company.
This is not my seller's first home sale and she would have preferred another company that she has used before and is known for their superior service. So at settlement, she casually asked the BA is she held a direct ownership position in the firm being used. After more than a pregnant pause, the BA stated that she was in fact a partial owner, but she selected them for their professionalism and price (they were definitely competitive on service charges, but not so sure on the title insurance). I'm not sure how to describe the buyer's facial reaction, other than confused, as this was apparently the first time she had been made aware of it. After some quiet discussion between the two, we completed settlement.
My questions for your comment, even if the settlement company you hold an interest in is great at what they do and price competitive, isn't the appearance of this arrangement too self serving? Also, if you engage in this practice, wouldn't you be better served to clearly disclose this early so that it doesn't come back to bite you later?