Here is a right many home buyers do not know they have: you generally get to choose your own title and settlement company. You do not have to accept whoever the seller or the agent suggests. Let me explain the rule and why it is worth using.
Written by Anthony I. Shin, Esq., Principal and real estate attorney at Prime Title & Escrow
When you make an offer, someone may hand you a recommended title company as if it were settled. It usually is not. Federal law gives buyers real protection here, and understanding it lets you pick a settlement agent who is clearly on your side.
Under Section 9 of the federal Real Estate Settlement Procedures Act, known as RESPA, a seller cannot require you to buy title insurance from a particular company as a condition of selling the property when a mortgage is involved. In other words, the choice of your title company is generally yours to make.
What Section 9 actually says
Section 9 of RESPA, found at 12 U.S.C. 2608, states that no seller of property purchased with the help of a federally related mortgage loan may require, directly or indirectly, as a condition of the sale, that the buyer purchase title insurance from any particular title company. That covers the vast majority of home purchases, since most involve a mortgage. The point is to keep the choice with the person paying for the coverage, which is you.
The penalty has teeth
This is not a guideline a seller can quietly ignore. Under Section 9, a seller who violates the rule is liable to the buyer for three times all charges made for the title insurance. That treble penalty is why the protection matters: it gives buyers a real remedy and gives sellers a real reason to respect the buyer’s choice.
The one narrow exception
There is a nuance worth knowing. Because the rule protects the person buying the title insurance, a seller may be able to choose the company only if the seller pays the entire cost of the title insurance, so that the buyer is not the one purchasing it. Attempts to require the buyer’s company while shifting the cost back to the buyer in some other way are exactly what Section 9 is designed to catch. When you are paying, the choice is yours.
Choosing your own settlement agent means working with someone you trust, someone who answers your calls, explains your documents, and is clearly accountable to you. The Consumer Financial Protection Bureau encourages buyers to shop for title and closing services rather than accept the first name offered. Comparing service and fees is reasonable and expected, and a good settlement agent will welcome your questions, not bristle at them.
How to use it gracefully
You do not need to make this a fight. When someone recommends a title company, you can simply say you would like to use your own and name your choice in the contract. If you are working with me, I will coordinate with everyone else in the transaction so the change is smooth. The goal is not to create friction, it is to make sure the person handling your largest purchase is someone you selected.
It also helps to settle this early, ideally when you write your offer, rather than after the contract is signed. Naming your settlement agent up front avoids an awkward conversation later and makes clear from the start who is handling your closing. If a listing already names a title company, you can still ask to use your own, and a reasonable seller will not treat that as a deal breaker.
All of this applies to purchases involving a mortgage across Virginia and West Virginia. In an all-cash deal RESPA does not govern the choice, but you can still ask for the settlement agent you prefer. Either way, do not assume the decision has been made for you, because in most cases it has not.
Tell me about your purchase and I will explain how to name your title company in the contract and coordinate the rest of your closing.
Get Your Free Quoteor call (703) 552-4155Frequently asked questions
Can the buyer choose the title company?
Generally yes. Under Section 9 of the federal Real Estate Settlement Procedures Act, a seller cannot require you to buy title insurance from a particular company as a condition of selling the property when a federally related mortgage is involved. You have the right to choose your own settlement agent.
Can a seller make me use their title company?
Not as a condition of the sale when you are getting a mortgage, with a narrow exception. Section 9 of RESPA prohibits a seller from requiring, directly or indirectly, that you buy title insurance from a particular company. A seller may be able to choose only if the seller pays the full cost of the title insurance.
What happens if a seller violates this rule?
Under Section 9 of RESPA, a seller who illegally requires you to use a particular title company is liable to you for three times all charges you paid for the title insurance. It is a meaningful penalty, which is why the rule has teeth.
Why would I choose my own title company?
To get a settlement agent you trust, to compare service and fees, and to have someone clearly working for your interests. The Consumer Financial Protection Bureau encourages buyers to shop for title and closing services rather than simply accept the first suggestion.
Does this apply to all-cash purchases?
Section 9 of RESPA applies to purchases involving a federally related mortgage loan. In an all-cash deal with no lender, RESPA does not govern the choice, so the buyer and seller negotiate it like any other term. Even then, you can ask to use the settlement agent you prefer.
This article is general information about choosing a title company under RESPA and is not legal advice for your specific transaction. RESPA Section 9 has nuances, and how it applies depends on your facts, including who pays for the title insurance. Please confirm the details with me directly.