The Hidden Impact of Realtor–Title Company Joint Ventures

If your realtor or brokerage has a joint venture (JV) with a title company, it means they share in its ownership and profits. While this setup is legal under the Real Estate Settlement Procedures Act (RESPA), it’s important to understand how it may affect you as the seller.

1) Potential Conflicts of Interest

A JV gives the agent or brokerage a financial incentive to recommend that specific title company. Convenience is real, but the recommendation may not always be the most cost-effective or best-performing option for your needs.

2) Legal Disclosure Requirements

Under RESPA Section 8, an agent who refers clients to a company they co-own must provide an Affiliated Business Arrangement Disclosure that clearly states:

• The nature of the ownership relationship,
• An estimate of the title fees, and
• A statement that you’re not required to use that company.

If you don’t receive this disclosure, it’s a red flag. Brokers can face penalties for non-compliance, and sellers may be unaware that the referral involves a financial interest.

3) Cost and Service Quality

Because the brokerage benefits when you use the JV, you may:

• Pay more in title or settlement fees, and/or
• Experience variable service levels depending on that company’s operations.

4) Convenience vs. Choice

Affiliated title companies are often pitched as a “one-stop shop.”

• Pros: Streamlined communication, faster processing, fewer handoffs.
• Cons: Less competition, reduced flexibility, and potential bias.

Bottom line: Verify that convenience doesn’t cost you more or restrict better options.

5) Negotiation and Transparency

When the brokerage controls the title process, it may limit your ability to negotiate title fees or choose services à la carte. Independent providers often have more flexibility to adjust fees or bundle services.

6) How Sellers Can Protect Themselves

1. Ask directly if your agent/brokerage has an ownership interest in the title company.
2. Request the disclosure in writing early in the process.
3. Get a competing quote from a non-affiliated title company.
4. Review your ALTA Settlement Statement early to confirm fees are reasonable.

You always have the legal right to choose your own title company.

Local Expert Insight — Jim West, Marysville Realtor

“Transparency builds trust. Whether you choose my recommended title partner or your own, I’ll make sure you understand every fee and option before closing.”

Frequently Asked Questions for Home Sellers