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Florida Real Estate Agents May Act Against Sellers’ Best Interests, Broker Says

What Agents Don’t Tell Customers About Section 9(c) Costs Them Thousands!

TAMPA, FLORIDA – Consumers planning to sell their homes or investment real estate need to be wary of ’sweetheart deals’ between real estate agents and title companies – arrangements that could add from $800 to $5,000 or more to their closing costs.

In fact, one Tampa-area real estate broker says that sellers often aren’t told by their agent that they can avoid some or all the added expense.

“In 1974, Congress enacted legislation known as RESPA that ended the kickbacks and referral fees paid to agents by title companies,” said Tampa broker Scott H. Lewis, GRI. “Even so, title companies continue to market to the real estate community, offering lawful non-monetary resources to agents to help them find new clients, or even renting office space from real estate brokers. The result is that brokers and their agents steer customers to favored title companies.”

That creates a conflict of interest for the real estate agent, Lewis says. When agents representing sellers specify their favorite title company in the advertising they submit to their multiple listing service, they’re obligating their customer – the seller – to pay for the Owner’s title policy that will be issued by the title company. The cost of that policy is tied to the price of the property being sold. For a $250,000 home, the premium is about $1,300.

When a seller chooses a title company, the sales contract reflects that in paragraph 9(c). That’s when the seller goes on the hook for the cost of an Owner’s policy.

“I find that seller’s agents rarely disclose this to their customers,” Lewis said, adding that absent the agent’s affinity for a specific title company he or she could just as easily allow the buyer to choose the title company – and pay the fee – or even split the expense with the other party.

“At the very least, the issue of paying for the Owner’s policy should be negotiated by the parties in the open, rather than the selling agent blithely obligating his or her customer.” Lewis said. “Sellers see the cost as one of many unavoidable fees, but the ethical agent needs to advise the seller of all options so an informed choice can be made.”

Advocating for a customer isn’t optional for Realtors, whose code of ethics requires them “to protect and promote the interests of their client” and “to treat all parties honestly.”

“I don’t think you can adequately protect your customer’s interests if your loyalty to a title company comes first,” Lewis said. “Everyone values business relationships, but the client should decide whether paying for a title policy should be negotiated rather than automatic.”

For more information: Scott H. Lewis is broker/owner of Scott Lewis Realty, which exclusively represents sellers throughout Florida. He can be reached at

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