When a Listing Forces the Contract to their Title Company

What can I do when a listing forces the contract to their title company?   I don’t participate in a Joint Venture and want to choose an independent title company, but the listing agent says the offer should include their Joint Venture title company as the closing agent. I don’t want to lose the deal, but my buyer doesn’t want to be forced to use their company. What can I do?

Unfortunately, this scenario is dominating the local market.  We get calls from agents daily complaining that they are being forced into using the Listing Agent’s Joint Venture title company.  Federal Title has pointed out the ethical concerns in multiple blogs previously.

However, quite simply, when a listing forces the contract to their title company, they are in violation of RESPA.

As a buyer’s agent, you should point out that RESPA provides that:

1. It is the buyer’s right to choose the title company.
2. If the seller/listing agent requires a specific title company, per RESPA the seller must pay for the title insurance and all title insurance related costs.
3. If the seller/listing agent still requires their Joint Venture title company but refuses to pay fees, per RESPA, the penalty to the seller will be three times all charges made for title insurance.

If the seller/listing agent ignores this and still requires it, or if they reject your offer based on these grounds, your potential buyer still has rights.  You should contact our office to discuss the matter further.