If you're buying new construction in Frisco, Prosper, McKinney, Celina, Sherman, Little Elm, Aubrey, or any other fast-growing North Texas suburb, you’ll almost always run into this line in the builder contract:
“Buyer must use builder’s title company.”
This catches buyers off guard—especially since resale transactions in Texas usually allow the seller to choose the title company and pay for the owner’s title policy.
But in new construction, the rules are different.
Let me walk you through exactly how builder title policies work, what’s negotiable, and how I protect my clients.
1. Builders Require Their Own Title Companies — Here’s Why
Builders use their own title companies because it gives them:
✔️ Control
✔️ Speed
✔️ Lower internal costs
✔️ Predictable processes
✔️ In-house coordination with closers
✔️ Access to builder-specific documentation
This reduces delays and simplifies the closing process on their side.
The title company is almost always owned by, or financially tied to, the builder.
2. Title Policy Rules Are Different for New Construction
For resale homes:
✔️ Seller often pays for the owner’s title policy
✔️ Buyer chooses lender
✔️ Parties negotiate title fees
For new construction:
❌ Builder rarely pays the owner’s title policy
❌ Builder requires you to use their title company
❌ Builder can remove incentives if you choose a different title company
✔️ Builder pays for the lender’s title policy (sometimes)
✔️ Builder controls the closing timeline
Everything is structured to benefit the builder.
3. Why Builders Offer Incentives Only If You Use Their Title Company
You’ll often see:
đź’° “$10,000 closing cost credit if you use our preferred lender and title company.”
đź’° “Special interest rate available only with our partners.”
This is because:
✔️ The builder receives reduced processing fees
✔️ The builder’s title company makes money on the policy
✔️ The builder uses the lender/title combo to ensure smooth closing
It’s not a scam—it’s business strategy.
My job is to help you determine whether the incentive truly benefits you, not just the builder.
4. Is the Builder Title Company Mandatory?
✔️ Usually yes.
Builder contracts almost always require the buyer to use their title company for the owner’s title policy.
But buyers often still have choices:
✔️ You can use your own lender (usually)
✔️ You can choose your own insurance provider
✔️ You can choose your own inspector
✔️ You can dispute fees if something looks incorrect
✔️ You can ask for a credit to offset higher title costs
I negotiate these leverage points for you.
5. Can You Fight the Builder Requirement?
Most of the time:
❌ No, you cannot force a builder to use a different title company.
But, you can negotiate the financial side of it.
Examples of wins I negotiate:
✔️ Builder pays the owner’s title policy
✔️ Builder increases closing cost credits
✔️ Builder waives junk fees
✔️ Builder reduces escrow fees
✔️ Builder covers HOA setup fees
✔️ Builder covers survey costs
These can save buyers thousands—even if the title company is non-negotiable.
6. Are Builder Title Companies Safe?
Yes.
Even though they’re affiliated with the builder, they must follow:
✔️ Texas Department of Insurance regulations
✔️ RESPA laws
✔️ State filing rules
✔️ Standard title underwriting guidelines
Your title policy is still issued by a national underwriter such as:
-
Stewart
-
Fidelity
-
First American
-
Old Republic
The builder’s title company simply handles the closing process, not the insurance underwriting itself.
7. How Much Does a Title Policy Cost?
In Texas, title policy rates are regulated by the state—so pricing is:
✔️ Fixed
✔️ Public
✔️ Non-negotiable
Choosing one title company over another won't change the title insurance premium.
BUT:
Other fees (escrow fee, courier, endorsements, etc.) can vary, and builders sometimes charge more supporting fees than resale title companies.
This is where I negotiate to keep your costs down.
8. Builder Title Company Pros & Cons
Pros:
✔️ Extremely fast
✔️ Coordinated directly with builder
✔️ Familiar with builder phases
✔️ Easier scheduling
✔️ Usually offer strong incentives
Cons:
❌ You cannot shop around
❌ Escrow fees may be higher
❌ Less flexibility
❌ Less consumer-centric than independent title companies
❌ Incentives require using preferred partners
I manage the relationship so you get benefits—not headaches.
9. Watch Out for Builder “Required Fees”
Some builder title companies charge:
❌ High mobile notary fees
❌ Duplicate HOA fees
❌ Excessive endorsements
❌ High processing fees
❌ “Compliance” charges
I review your Closing Disclosure to remove anything unnecessary.
10. How I Protect Buyers With Builder Title Companies
When you buy new construction with me, I:
✔️ Review the builder contract before you sign
✔️ Explain all title requirements
✔️ Break down the fee structure
✔️ Negotiate incentives to offset costs
✔️ Communicate with the title company early
✔️ Verify payoff amounts and escrows
✔️ Confirm survey rules (builder often provides a plot plan only)
✔️ Review the CD for accuracy
✔️ Ensure you receive the correct title policy coverage
Using the builder’s title company is rarely optional—but your protection is.
11. When It Actually Makes Sense to Use the Builder’s Title Company
It usually makes sense when:
✔️ The builder is offering a large closing cost credit
✔️ You’re getting a strong permanent rate buydown
✔️ Incentives exceed any cost differences
✔️ Closing schedule is tight
✔️ You want everything streamlined
My job is to help you calculate whether the incentive is truly worth it.
12. My Rule of Thumb
**Don't fight the builder’s title company—
negotiate the incentives around it.**
This always leads to a better outcome.
Bottom Line: Builder Title Companies Are Standard in Texas—But You Still Need Protection
Builder title companies make the process faster and more convenient for builders, not buyers.
That’s why it’s essential to have a Realtor who:
✔️ Understands builder contracts
✔️ Knows how incentives really work
✔️ Reviews every line of your CD
✔️ Protects your deposit
✔️ Negotiates aggressively on your behalf
When I represent you on new construction, you get a strong advocate—not just someone “opening doors.”
Want a Realtor Who Knows Builder Processes Inside & Out?
If you're building in North Texas, I’d love to walk you through title requirements and maximize your incentives.
