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You may have inadvertently violated RESPA without realizing it.

Updated: Mar 29

Before, during and after a closing there are multiple moving pieces, it is sometimes hard to keep track. Unfortunately, there are practices and expectations that are considered common during this time frame but actually violate RESPA and if you are not familiar with the law, you may violate it.

When it comes to selecting a title company or attorney as the buyer, it is perfectly okay for a realtor to recommend one or more title agencies to pick from. Remember, the buyer and seller decide who represents them in a closings.

It is also ok for the seller to require that the buyer use their settlement agent (title company) instead of the buyer selecting their own, only if the seller pays for the owner's title policy. Normally, the buyer in Miami-Dade and Broward counties selects their title company and pays for their owner's title policy. It is a violation of Section 9 of RESPA for a seller to require a home buyer to use their title company, "... [p]rohibits home sellers from requiring home buyers to purchase their settlement services from a particular company either directly or indirectly, as a condition of sale. Buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance." If a seller is requiring their preferred title company then they must also pay the owner's title policy.

This information is not given as legal advice. Please contact an attorney regarding your specific situation.


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