Who Selects and Pays for Title Company?
Longer Answer: Check your contract.
See, three words vs. two, it’s longer. 🙂
But really, check your contract! Section 8 covers Title Insurance, Record Title and Off-Record Title.
8.1.1 – if checked, or of neither 8.1.1 or 8.1.2 is checked, then Seller selects and Seller pays for record title.
8.1.2 – If checked, Buyer selects and Buyer pays for record title.
8.1.3 – OEC will be paid as noted – by Buyer, Seller, 1/2 and 1/2, or Other
There are many allowable variations, but one important prohibited option — Seller selects and Buyer pays.
Section 9 of RESPA states, in part, 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) shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.
- RESPA Section 9 applies to loans with a “federally related mortgage”. Which, in reality, covers most loans. See this article at USLegal.com for more details. This prohibition would not apply to, say, a cash deal, or some private financing.
- A great article that goes into more detail about Section 9 can be found this article by Hawley Troxell.