In our Texas promulgated contract forms there is a blank for the title company who issues the owner title policy and a box to check as to who pays for it. In Texas generally the seller pays for the title policy because they are ones who could have created issues that may need to be cleared to provide clear title to the property.
In our sellers market if the seller and listing agent suggests closing with a certain Title Company then a buyer’s agent will usually want to make a clean offer and follow the recommended title company to use.
Technically if the seller pays for both the owner policy and the lender policy of title insurance (usually a buyer cost) then the seller can pick the title company without violation of the Real Estate Settlement Procedures Act (RESPA).
In very few cases in Texas do we see the buyer pay for the title policy but if they do the buyer has the right to choose the title company.
RESPA application is less clear when the seller pays for the owner’s title policy and buyer pays for the lender policy. There is one court ruling that stated if the seller paid for the owner title policy and the buyer paid for the lender policy the seller did not violate RESPA by insisting on a particular title company for the title policy. The court went into detail explaining the seller did not require as a condition of the sale that the buyer use the same company to issue the lender policy.
You would think that would mean..it’s a wrap! However the Consumer Financial Protection Bureau (CFPB) who enforces RESPA has not taken an official position on the law’s relevance in this situation. With all the CFPB has to oversee hard telling when they will make a ruling or if they ever will. Therefore if a seller wants to avoid a possible breach of RESPA it is suggested not to insist on a particular title company in a transaction unless the seller is paying for both the owner policy and the lender policy of title insurance.
P.S. If you are a homeowner thinking of selling, a prospective buyer or just curious about real estate in NW Austin; I welcome the opportunity to discuss our market. I am a recognized professional in NW Austin real estate. I’m a good listener and act, not react to your needs. I have systems in place, references at hand and proven solutions to getting your home sold. I will guide you through the process answering any and all questions.
Feel free to contact me at 512-346-1799 or dillard@reloaustin.com. I offer professional guidance for residential home sellers and buyers.
Don’t forget to visit my website: www.reloaustin.com
 |
      
        Dorie Dillard is the most frequently hired REALTOR® in the Canyon Creek Subdivision. “YOUR PERFECT PARTNER”
|
