Skip to content
ClosingCodeClosingCode
ENES

RESPA section 9 · title insuranceCan the seller choose the title company? What RESPA section 9 says

Who orders title and who pays for which policy is mostly a matter of local custom and the contract. But federal law sets one hard limit: no seller of property bought with a federally related mortgage loan may require, directly or indirectly, as a condition of selling, that the buyer purchase title insurance from any particular title company (RESPA section 9, 12 U.S.C. 2608(a)). A seller who does is liable to the buyer for three times all charges made for that title insurance (§2608(b)). The rule targets requiring a particular company as a condition of the sale; a contract that simply names a title company both sides agreed on is a different question – the facts matter.

The statute in two lines

  1. The rule

    No seller may require, directly or indirectly, as a condition of selling, that the buyer buy title insurance from a particular title company (12 U.S.C. 2608(a)).

  2. The penalty

    The seller is liable to the buyer for three times all charges made for the title insurance (§2608(b)).

  3. Which deals

    Property purchased with the assistance of a federally related mortgage loan – most financed home purchases.

Red flags a TC should raise with the agent or broker

  • A listing or counteroffer that says the seller will only accept offers using one title company.
  • Pressure to switch title companies after the contract, framed as a condition of closing.
  • A seller credit offered only if the buyer uses the seller's title company – ask the broker or an attorney.

Usually not the issue

  • Local custom on who pays the owner's policy – that is negotiated in the contract.
  • A title company both sides agree on and write into the contract.
  • The lender requiring its own title insurance policy for its loan – section 9 is about the seller.

Questions buyers and agents ask

Can a seller require a buyer to use their title company?

Not as a condition of the sale when the buyer uses a federally related mortgage loan: RESPA section 9 forbids it, with liability of three times the title insurance charges (12 U.S.C. 2608).

What is the penalty for violating RESPA section 9?

The seller is liable to the buyer for three times all charges made for the title insurance (12 U.S.C. 2608(b)).

Does RESPA section 9 apply to cash sales?

The statute covers property purchased with the assistance of a federally related mortgage loan; a cash sale without such a loan is outside its words. State law may still apply.

Related guides

ClosingCode takes no referral fees and does not steer anyone to a title company – the parties choose, and the deal keeps a record of who did what.

Start free trial

Source: Real Estate Settlement Procedures Act, section 9, 12 U.S.C. 2608 (govinfo, read October 25, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm, lender, title company or brokerage. Lenders and investors can add their own rules. This guide is not a substitute for the advice or services of an attorney.