New Construction, Your Choice: Buyers Can Choose Their Title Company

Agents and REALTORS®, before your buyers walk into a builder's sales office, remind them of something easily overlooked: buying a newly built home does not automatically mean they must use the builder's preferred title company.

The Texas Department of Insurance explains that buyers may choose any title company they want — they don't have to use a company selected by a real estate agent, builder or lender (TDI, Title Insurance FAQ). That conversation belongs at the beginning of the transaction, before the buyer signs the contract.

When buyers visit builders such as D.R. Horton or Lennar, they may encounter affiliated companies offering financing and title services. D.R. Horton's affiliated businesses include DHI Title (DHI Mortgage affiliate disclosure). Lennar also offers title services through an affiliate and states that using Lennar Title is not required to purchase a home. These arrangements can offer convenience, but buyers should still understand their choices.

Federal law provides an important protection. For purchases involving a federally related mortgage loan, Section 9 of RESPA prohibits a seller from requiring — directly or indirectly, as a condition of the sale — that title insurance be purchased by the buyer from a particular title company (12 U.S.C. § 2608). Because that protection can turn on who pays for the title insurance, clarify in writing who pays for the owner's policy, the lender's policy and each closing charge, and seek legal review of any required-provider provision.

Bring the title conversation into the sales office

Ask the builder to identify the proposed title company, explain who pays the title premium and closing fees, and document the buyer's preferred provider before the contract is finalized.

Be careful with incentives

A buyer's ability to choose a provider does not automatically mean every advertised credit or promotional package stays available on identical terms. Ask for incentive requirements in writing, compare the complete costs, and seek legal review if a restriction appears to interfere with the buyer's rights. Don't assume every restriction is lawful — or that every incentive disappears when the buyer chooses another provider.

A simple way to begin:

"Our buyer would like to use People's Title. Please explain how we can reflect that choice in the contract and provide any proposed changes to costs or incentives in writing."

Same premium, different service

Texas sets title insurance premium rates, so the same coverage at the same insured amount generally carries the same premium across companies. Escrow and closing charges can differ, and TDI encourages buyers to shop and compare them (TDI). That makes service, communication and the full cost comparison meaningful parts of the decision.

At People's Title, we welcome the chance to work with you and your buyers on their new-construction purchase. Contact us early so we can coordinate the title and closing requirements.

Your buyers choose their home. Make sure they understand their title company options, too.

Open an order: orders@peoplestitlecompany.com