Quick Answer
Who chooses the title company depends on the transaction, the purchase contract, state law, local custom, who pays for title services, and the lender's requirements. In many transactions, the choice can be negotiated between buyer and seller.
One of the common questions in any real estate transaction is who gets to choose the title company. The answer is not always the same, but here are the factors that determine it.
The Purchase Contract Matters
Many standard purchase contracts include a provision specifying who selects the title company. Some contracts give the buyer the right to choose. Others give the seller the right. Many simply say the parties will mutually agree. Always check your contract first.
Local Custom Matters
In some markets, it is customary for the seller to choose the title company. In others, the buyer selects. In still others, the party paying for the title policy gets to choose. These customs vary by city, county, and state. If you are not sure what is typical in your area, ask your real estate agent or attorney.
Federal Consumer Protections Can Matter
Under the Real Estate Settlement Procedures Act (RESPA), a seller cannot require a buyer to use a specific title company as a condition of the sale (with some exceptions). If you are a buyer and the seller is pressuring you to use a particular company, you have rights under federal law.
Lenders Also Have Requirements
The lender may have a list of approved title companies they will accept. If the buyer chooses a company not on that list, the lender may not accept the title work. This is becoming less common but still exists. Always confirm with your lender before selecting a title company.
Can the Choice Be Negotiated?
Yes. If one party has a strong preference for a particular title company, it can be negotiated as part of the purchase contract. If you are a buyer who wants to choose the company, you can request that right in your offer. If you are a seller who prefers a specific company based on past experience, you can propose that in the contract terms. Learn more about buyers choosing the title company and sellers choosing the title company.
Key Takeaway
The choice of title company can be negotiated and should be discussed early in the transaction. Check your contract, understand local custom, confirm with your lender, and choose a company that has the experience to handle your specific type of transaction. Why experience matters when choosing a title company is an important consideration.
FAQs
Can a seller require me to use their title company?
In many states, a seller cannot require a buyer to use a specific title company as a condition of the sale. However, the purchase contract may specify who chooses. If you are concerned about this, discuss it with your agent and attorney early in the process. See Can a Buyer Choose Their Own Title Company?
What if I do not know any title companies?
Ask your real estate agent for recommendations, check with your lender, or research title companies in your area. Look for companies with experience in your type of transaction. Choosing an experienced title company is important regardless of who selects them.
Can you change title companies after opening escrow?
Switching title companies after escrow has been opened is possible in some cases, but it involves complications. Learn about changing title companies after opening escrow.