Real estate agent - commission for recommending a title company?

Asked by Sarah, Ohio Wed Apr 13, 2011

My REA recommended a title company to use for my purchase. I agreed. I'm a first time home buyer - and I didn't think it mattered. My mortgage broker (who I've known forever - family friend) told me that she gets a commission from them - so that's why she's so insistent that I use that title company, but that there are other companies who are hundreds of dollars cheaper.
I told my REA that I was going with a different company. She called back and said that she had heard bad things about that company, that one client had her credit completely screwed up by them not processing things correctly, and that the prices were set by the state so they should all be the same. But if one company did give me a discount, the others would match so it was better to go with the company she recommended.
Does she have a vested interest? Does she get a commission if I go with her company or is she just trying to save me a headache? I trust her but this has me second guessing everything.

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Dee Nofziger, Agent, Toledo, OH
Wed Apr 20, 2011
The part that disturbs me the most is the behaviour of your lender. They absolutely know that kickbacks aren't allowed and should never have said that to you. I wonder about their reason for such a hostile reaction to title company choice. That's just plain wrong.

Also, title company choice is 99.9% of the time written into a purchase contract and is agreed to in that manner between buyer and seller. It is not appropriate for a lender to want a contract altered after the fact.

There is little difference in title company fees, but great difference in service and reputation.
1 vote
Scott Hulen, , 64068
Thu Apr 14, 2011
Ask the direct question of does she or her broker or agency have an interest in the title company she is steering you to use? Ask her if she or broker or the agency receives any consideration from said company. If yes and this has not been disclosed you have options, in any event because you feel uncomfortable just use different title company. Good Luck
1 vote
Brenda Feria, Agent, Richmond, VA
Thu Apr 14, 2011
Sarah, Since what Mark Ryan said is true about this being a violation of RESPA, I would hope that this is not true. This is a serious allegation.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Wed Apr 13, 2011
I will join the others in saying we don't get 'referrals' from title companies - we can't accept money, as it would be considered a kickback.

In addition, as agents, we can't receive any money that isn't passed through the Broker.

I am always referring attorneys, home inspectors, exterminators, radon testing and remediation companies, oil tank removal companies.and a bunch of other vendors,, and have never gotten a penny - nothing..........well, maybe they gave me a pen with their name on it!
My concern is that the buyer or seller get top notch service from anyone I recommend!
1 vote
Mark Ryan-Ma…, Agent, Centerville, OH
Wed Apr 13, 2011
It is illegal to get a kick back from the title company... It is a RESPA violation. I know why we strongly recommend the title comany we do is Bessemer we will do about 70 deals with them this year and they take very good care of our clients... Fees are regulated on title insurance in the state but there are other fees that can change... My advice is if you trust your agent then go with their suggestion... Unless you had some relationship with another company go with the one they have a relationship with. Also, keep in mind that this is a VERY big deal and the lowest price is not always the best...

Hope that helps!

1 vote
Kandyce Pran…, Agent, Bethesda, MD
Mon Apr 8, 2013
Contact our Bancstar Title directly. We have reliable realestate agents on our team as well as a mortgage company. Because we are a one stop shop we can offer you a great deal.
0 votes
OP already has a real estate agent, so your trying to solicit her in that respect is a violation. If you were a respectable company, you should be aware of that.
Flag Fri Mar 25, 2016
Spirit Messi…, Agent, Tucson, AZ
Thu Apr 14, 2011
Who told you that she gets a referral commission? She shouldn't, period. With my clients I may recommend (fill in the blank) but only after I tell them that they are free to use anyone they want. I have never received anything from them, I only recommend if I have personally used them & etc. I would call your agents broker.

Please do not " feel bad" about this as you have rights & they are being violated. At least if that was here in Arizona, I doubt something this fundamental would be different in Ohio.

Best of luck.
0 votes
John Juarez, Agent, Fremont, CA
Wed Apr 13, 2011
We expect, and receive, excellent service from the title company that we recommend. In our area the same company provides both title insurance and escrow service. If the title company was to give us anything of value – most especially including a fee for recommending them – it would be an illegal payment.
0 votes
Amy Gutschow, Agent, Sheboygan Falls, WI
Wed Apr 13, 2011
I can assure you that I have never received any incentive to bring clients to the title Co I often recommend to clients who do not already have a title agent. The reason I recommend them is because I know the deal will close on time and that my clients will be treated wonderfully. It is important to keep all the parts of the deal rolling int he right direction and they are proven over and over again to be easy to work with and impressive in their attention to detail and customer service.

A added bonus is due to the volume of business I bring to them they give my Clients a great rate...I send my Title work to this Co to help my Clients, not myself.
0 votes
Mark Ryan-Ma…, Agent, Centerville, OH
Wed Apr 13, 2011
Another thought... Again it would be illegal if she got an undisclosed commission but if she told you and you still got great service from the title company would you care? If the cost is about the same and more importantly the title work is done right then the commission really should not matter... They could possibly have an ownership interest in the title company and make money that way but they MUST disclose that...
0 votes
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