In a recent post I wrote, I commented on an upcoming ruling that will be implemented on January 16, 2009 that will affect incentives a New Home builder gives the buyer of one of their homes if that buyer using the builder's "in house" lender, and/or the builder's preferred or in-house title company.
In my first post a few days ago... all the discussion concerned using either the builder's preferred lender, or their "in house" lender, or the buyer using an outside/buyer chosen lender.
There were plenty of great comments, and a good discussion followed.
This post will cover the use of the builder's "preferred" title company, or the builder's "in house" title company... chosen, and then required, by the builder... which in this case... I mean the "production" builder.
First of all, in Texas, the title fees charged do not matter very much because title insurance fees are regulated by the state... so it's the same fee/cost from title company to title company.
If you are considering the difference in customer service, or the exact location of using the builder's title company (as far as driving time is concerned), or using your (The Realtor's) preferred title company... should you (the Realtor) or the buyer be allowed to use a different title company than the builder's preferred one ?
If there really is no difference in fees because of Texas law... this question should not even come up.
Here are some other reasons:
The (production) builder has closed hundreds of homes with their preferred or in-house title company. If any title issue whatsoever comes up during the actually closing, the in-house title company is already prepared with necessary documents to handle the problem.
The in-house title company also has a track record of handling other "glitches" that have happened at the last minute.
Also... if this particular in-house title company closes all of the production builder's closings... the fees may actually be less than using an outside title company due to the volume of closings.
But... let us not forget one last thing. The builder is "the seller..." and as such is probably paying for the title policy. If that is the case... it is not only right... but it also makes sense... that the builder be able use their own in-house title company.