In reality it means that THE SELLERS AGENT insists on a particular title or escrow company. In all my days I've run across exactly zero sellers who even know what title insurance is, much less care who writes the policy. The same for escrows. Despite the fact that it is a RESPA violation (section 9(a)) many listing agents continue to expose their sellers to liability.
This is an issue that HUD dealt with extensively in the 90's and it will reemerge as the business gets tougher...title companies will be greasing agents to get the reduced book of business. I've had offers come back with ONLY title and escrow countered out...do you think that the seller really cared?
As a broker I have a rule that when a buyers agent brings me a deal THEY choose title (unless it's their inhouse CBA) because the BUYER is the one who will be making the claim on the title policy if there is one. Escrow is theirs too unless it's inconvenient to the sellers location (or an inhouse CBA). I've found all escrow holders to be pretty good and the only time i counter them out is if they are one of the very few I've had crummy sevice from. (CBA stands for Controlled Business Arrangement. Many brokerages have inhouse escrow departments and title insurance affilliates. The agents get some benefit for driving the business to their brokers profit center...apparently commissions are not enough).
Several exceptions to my general rules are if there is an open title order on a sale or if an escrow cancelled. If I have a service provider that has time and money in a file then i feel obligated to see to it that they get paid. I am always clear with the agent and tell them that they are free to choose another company but they all understand the concept of getting paid and it's never been an issue. Another case might be where a home is being flipped and the seller placed a binder on the title policy which will save them money...they are rare though.
I am very interested to see where this thread leads...it's a hot topic for agents but the clients seem to be disinterested in it...for obvious reasons.
I think the traditional reasoning goes that the seller is supposedly delivering clean title, so he is the one who usually buys the insurance, as substantiation, essentially in lieu of issuing a warranty. This is much the same as the reason, at least in my area, that the seller usually pays for a home warranty, to substantiate the condition of the home.
But you should also know that RE-SPA guidelines actually give the buyer the right to chose the title service provider. http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm
However, this also generally means the buyer pays for the title policy (there is a lender's policy and an owner's policy and they can be simultaneously issued to save money) the lender's policy covers just the lender in the event of a claim. The owner's policy covers the purchaser if there are claims against the title.
The seller can generally control the choice of the title service provider - if they elect to pay for the policy.
I've never been able to understand, other than area protocol - why a seller pays for the buyer's insurance policy. (other than the agents/brokers steer the business at the expense of the sellers but that's a whole other thread.) But it's actually protocol in Florida and other than with new construction (the builder's almost never buy it for the buyer's - but still control the choice of title company because many generally share in a benefit of the policy sale.) Seller's in Florida pay it and control the selection of the title company for closing.
The services to a certain degree are negotiable - if who's paying for it is negotiable. But just know that unless they are going to buy it for you - something for free - the legal position is, that a good number of the choices are the buyer's.
If the seller's don't know they aren't obligated to buy it for you, you might still be able to control the choice of title vendor by letting them know that by RE-SPA guidelines the buyer's choice prevails - the Seller's might still pay for them!
Good luck, hope this helps.
"Oh, I want to run out and see that house right away!!!"
Where I live, this is so common that I am tempted to advertise, "This house had NO seepage during that last national news making storm."
Back to my pet peeve (obsession really) with the "no survey" advertising. I've never bought or sold a house where a NEW survey wasn't obtained prior to closing. If a survey was done 3 years ago when the sellers bought the property, I would still get a new one. If the sellers have been living there for 50 years and don't have a survey, they wouldn't advertise "no survey". I've bought "as-is" homes that said "no survey" and it just meant that I chose and paid for the new survey. It doesn't mean there is a dispute over easements or anything like that and that you are not allowed to obtain a survey. Why give that impression? Maybe "no survey" is really a euphemism for "foreclosure" or "bank owned" just as "TLC" means "needs work" or that "fixer-upper" will most likely have an "as-is" clause.
So, back to "What does 'Seller reserves all services' mean? It MEANS that the BUYER should NEGOTIATE a BETTER PRICE. As the saying goes, "You can be firm on price or terms but not both." This person is stating that they are not flexible on terms, so go after the price. Just my opinion, here.
Class dismissed for Marketing 101 and Philosophical Real Estate Negotiations 101.
Thank you for reading,
P.S. I am not a tax adviser, accountant, attorney, real estate agent or any of those other professions that require you to have a license to give advice. This is just my personal experience that I am relaying - I am not giving PROFESSIONAL advice (just some common sense advice).
P.P.S. I'm I just passionate or do I need to attend some anger management classes?