"Buying a Home in Alaska: Who Chooses the Title Company When the Seller Pays for the Policy?"

The seller's counteroffer lands in your inbox on a Tuesday night, and page two has good news on it. The seller has agreed to pay for your owner's title insurance policy. One line below that, the listing agent has already typed in the name of the title company that will issue it, with a note that the title commitment has already been ordered. A title commitment is the title company's written report on the property and its offer to insure it. The page reads like a finished decision. In Alaska, the company name on that line is still yours to decide, whatever the rest of the page says.

In Alaska, you choose the title insurer for the home you are buying, even when the seller is paying for the owner's policy. The Alaska Division of Insurance says so in Bulletin B 07-03. The cost is negotiable between you and the seller, the choice of insurer is yours, and a seller who ties paid-for title insurance to one company is doing something the Division treats as potentially coercive.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including Alaska. This rule is worth knowing before your offer goes in, while the company name is still a blank line.

The policy we are talking about is the owner's policy. It protects your ownership for as long as you own the home, and it is the only insurance in the transaction that is for you rather than the lender. The difference between the owner's policy and the lender's policy has its own article.

Who chooses the title company in Alaska?

You do. The Division of Insurance regulates title insurance in Alaska, and in 2007 it published Bulletin B 07-03, a bulletin about preliminary title commitments being ordered before a property has sold. The bulletin says that closing fees, including title insurance, are negotiable between buyer and seller, and that the buyer chooses the title insurer. It treats ordering a commitment early, and conditioning seller-paid title insurance on a particular agency, as potentially coercive, or as an unlawful inducement under Alaska's insurance law.

Those are two separate questions, and they stay separate in your contract. The cost of the owner's policy is a term you and the seller can split any way you both agree to. The company that issues the policy is your decision, and the seller paying for it does not buy the seller that decision. The Alaska mortgage page covers the paying side, and this article stays on the choosing side.

The bulletin is about the sequence you just saw in that counteroffer. A listing agent can order a title commitment from a favored company the week the home is listed, and by the time you write an offer, "the title work has already been started" becomes the reason to leave it there. The Division looked at that sequence and came down on your side of it.

Can the seller pick the title company if the seller pays for it?

Federal law already answers part of this, in every state. Under Section 9 of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2608, a seller cannot require you to buy title insurance from any particular title company as a condition of selling you the property. The statute covers a property being bought with a federally related mortgage loan, and it applies whether the seller requires it outright or steers you there some other way. A seller who does it anyway is liable to the buyer for three times all the charges made for that title insurance. Most ordinary home loans are federally related mortgage loans under that law, so if you are financing the purchase, the statute is riding along with your file.

Alaska's regulator adds the state layer on top of the federal one. It has said in writing that the choice of insurer belongs to you, and it has said that conditioning seller-paid title insurance on one company is the kind of thing it views as coercive. The seller paying for the policy and the seller choosing the company are two different lines in the contract, and agreeing to the first one does not hand over the second. You can accept the seller's offer to pay and still name the company yourself.

The reason the choice is worth more in Alaska

In most of the country you can ask a title company to come down on its settlement fee, and it often will. Alaska runs the other way. Title rates here are filed with the Division of Insurance. Alaska's title rules do not allow a company to rebate or reduce the charges that come with issuing a policy, including its escrow, settlement and closing charges, beyond what it has filed. The Alaska pre-approval page explains that rule and what it does to the way you shop.

You cannot negotiate one Alaska title company's charges down, so the money moves when you compare companies against each other. Each company files its own schedule and states its own escrow and settlement charges, and the totals differ. Because no Alaska title company can discount its filed charges, comparing two or three companies' written quotes is how you pay less on this line. If the company name arrives already filled in on the seller's paperwork, you can still make that comparison.

There is a second reason the choice carries weight here. Alaska is not a mandatory attorney-closing state, and closings run through a title company, lending institution, escrow company or attorney with the parties' consent. The Alaska mortgage page has that detail and its source. The title company issuing your policy can also be the office that holds the escrow and runs your signing, so the name on that line can decide who you deal with for the next thirty days as well.

Writing the choice into your Alaska purchase contract

1. Get pre-approved before you are looking at a specific address. The Alaska pre-approval page covers the costing half of that, which is where Alaska is different. Once you apply, your Loan Estimate lists title services in the section called Services You Can Shop For. Federal rules treat a service as one you can shop for only when you are free to pick a company that is not on the lender's written list (12 CFR § 1026.37).

2. Compare two or three Alaska title companies before you write the offer. You are comparing filed premiums for the owner's policy and the lender's policy at your price and loan amount, plus the separately stated escrow and settlement charges. Please ask each company for a written quote that lists the premiums and the escrow and settlement charges on separate lines, so the comparison is line against line.

3. Write the company into the offer as its own line. You name the title company and the escrow holder in the offer itself, so everyone at the table is working from your choice from the start. The seller paying for the owner's policy goes on a different line, and in Alaska it is a term worth raising on purpose. You will be reading the seller's disclosure statement at the same time, because Alaska puts that document in your hands before the written offer, so this is the natural moment to settle both.

4. If the counteroffer comes back with a different company filled in, counter on that line alone. The seller's agreement to pay does not depend on the company name, so you can accept the payment and keep your company in the same counter.

5. Once you are under contract, read the commitment your company issues. Please ask the title company for the full title commitment, all schedules, and read Schedule B, the part that lists what has to be cleared before closing and what the policy will not cover. A title issue that comes up before closing lives on that schedule, and the article on it explains which items somebody has to clear and which ones stay.

6. Check the Closing Disclosure against the quote you compared. The title company's charges near the end of the file should match the written quote from step two. Comparing two Loan Estimates line by line is the same exercise with different paper.

Mistakes that give the choice away

Treating "title has been opened" as settled. A preliminary commitment ordered by the listing side before you existed is one company's document, and the company you choose can issue its own. The Division's bulletin exists because that early commitment was being used to keep the company in place.

Trading the choice for the payment. The seller's money and the seller's company arrive on the same page, and it is easy to accept them as a package. In Alaska the regulator has said they are separate, so you can take the money and keep the choice.

Reading the lender's provider list as the limit. You can use the list as a starting point and still pick a company that is not on it.

Skipping the comparison because Alaska charges are not negotiable. Because no company can discount its filed charges, comparing companies is the one step that lowers what you pay here.

An example, with invented numbers

Numbers below are made up to show the mechanism. They are not a quote and not a prediction of any company's filing.

You are buying a home in Alaska for $385,000 with a $346,500 loan. The counteroffer says the seller will pay for your owner's policy and names Company A, and the listing agent has already opened title there.

The version where you accept the page as written. Company A issues both policies and runs the escrow. The seller pays the owner's premium. Your side of the settlement statement shows the lender's policy at $1,050 and your half of the escrow fee at $900.

The version where you compare first. You ask Company A and Company B for written quotes with the lines separated. Company B's filed lender's policy comes in at $980 and your half of its escrow fee at $650, because the two companies filed differently. You counter on the company line only, keeping the seller's offer to pay for the owner's policy exactly as it was. The seller agrees, because the seller's cost did not change. Your side comes out $320 lower, and Company B is also the office running your closing. The home and the loan did not change, and neither did the seller's contribution; the two written quotes and one line in the counter made the difference.

Your next step on an Alaska purchase

Run your numbers with no credit pull, no account, and nobody calling you. Rates priced for your scenario, your debt ratio, and closing costs priced for Alaska rather than a national average.

If you are comparing Alaska with another state, who pays for title insurance, state by state shows how rare a written answer like Alaska's is.

Nothing here is a loan approval, a denial, a commitment to lend, or legal advice. The bulletin and the federal statute say what they say, and how they apply to your particular contract is a question for your own Alaska attorney. No letter from anyone is a loan commitment; final approval depends on the property, the appraisal and full underwriting.

Common questions

Who chooses the title company in Alaska?

The person buying the home. The Alaska Division of Insurance states in Bulletin B 07-03 that closing fees, including title insurance, are negotiable between buyer and seller, and that the buyer chooses the title insurer. The bulletin also treats ordering a preliminary commitment early, and conditioning seller-paid title insurance on a particular agency, as potentially coercive or an unlawful inducement. The choice belongs to you whether or not the seller is paying for the policy.

Can the seller require me to use their title company if they pay for title insurance in Alaska?

No. Alaska's regulator has said in writing that the choice of insurer is the buyer's and that tying seller-paid title insurance to one company is the kind of conduct it treats as coercive. Federal law points the same way for any purchase financed with a federally related mortgage loan. Under 12 U.S.C. § 2608, a seller cannot require, directly or indirectly, as a condition of the sale, that the buyer purchase title insurance from a particular company. A seller who does is liable for three times the title insurance charges. The way either rule applies to your specific contract is a question for your attorney.

Who pays for owner's title insurance in Alaska?

It is negotiated in the purchase contract. The Division of Insurance says closing fees, including title insurance, are negotiated between seller and buyer, and no statewide form or custom assigning the cost to either side could be found. Choosing the title insurer and paying for the owner's policy are two separate terms, and both belong in the agreement. The Alaska mortgage page at /mortgage/alaska covers the paying question in full.

Can I negotiate title insurance fees in Alaska?

Not with a single company. Alaska's title rates are filed with the Division of Insurance. The state's title rules do not allow a company to rebate or reduce the charges that come with issuing a policy, including escrow, settlement and closing charges, beyond what it has filed. The way to pay less is to compare two or three companies' filed premiums and separately stated settlement charges and choose the one that comes out lower, since companies file differently.

Do I have to use a title company from my lender's list?

No. The Loan Estimate lists title services in the section called Services You Can Shop For. Federal rules treat a service as one you can shop for only when you are free to choose a provider who is not on the lender's written list, so the list is a starting point. Your lender still has its own requirements for the policy itself, so tell your loan officer which company you have chosen as early as you can.

The listing agent already ordered title with their company. Is it too late to choose my own title company in Alaska?

No. A preliminary title commitment ordered before your offer is a document from one company, and the company you choose can issue its own. That early ordering is the exact situation Alaska's Bulletin B 07-03 addresses, and the Division treats using it to steer the buyer to a particular agency as potentially coercive. You can write the company you want into your offer or your counter and keep the seller's agreement to pay for the owner's policy on its own line, because the regulator treats those as two separate terms.