Do Denver Buyers Have to Use the Builder's Title Company?

Can a Builder Require Buyers to Use Their Title Company in Colorado?

No. Federal law, Section 9 of the Real Estate Settlement Procedures Act (RESPA), prohibits a seller, including a homebuilder, from requiring a buyer to purchase title insurance from a particular company as a condition of the sale. Colorado's Division of Insurance confirms the same rule: whoever is paying for the title policy has the right to choose the title agent and title insurance company, regardless of what a builder, lender, or agent recommends.

New construction is competing harder for buyers across the Denver metro area right now, and builders know it. Rate buydowns, closing cost credits, design center upgrades: the incentives are back in a way they haven't been in a few years, and that's a good thing for your clients. But a lot of those incentive packages come with a quiet assumption baked in: that the buyer will close with the builder's in-house or preferred title company.

Most buyers never ask whether that's actually required. Most agents don't either, because it rarely comes up outside of a new construction contract. It's worth knowing the answer, because the financial stakes aren't small, and it's a genuinely useful thing to be able to explain to a client who's staring down a builder's paperwork for the first time.

The Law Is Clear, Even When the Builder's Paperwork Isn't

RESPA Section 9 was written specifically to stop this kind of steering. A seller can't tell a buyer "you have to use our title company" and make it a condition of the deal. If a seller violates that rule, the buyer is entitled to recover up to three times all charges made for the title insurance.

Colorado backs this up at the state level, too. The Colorado Division of Insurance puts it plainly in its consumer guidance: title insurers compete on price, and shopping around is not just allowed, it's encouraged. Marcia Waters, director of the Colorado Division of Real Estate, has said the Division actively encourages consumers to select their own settlement service providers rather than defaulting to whatever a broker, lender, or builder suggests.

That right to choose applies whether someone is buying resale or new construction, and whether they're purchasing or selling. A recent case out of Aurora made this concrete: a homeowner compared title company rates before her sale and saved around $600 simply by shopping. Industry sources note that pricing on comparable title policies can range anywhere from $400 to $2,800 depending on the property's title history and available discounts. That's real money, and it's the buyer's call, not the builder's.

Why Builders Push Their Own Title Company Anyway

Here's the nuance worth understanding, because it's not as simple as "builders are breaking the law." Builders can't require a buyer to use their affiliated title company. What they can do is incentivize it: offering a closing cost credit, a rate buydown, or an upgrade package that's specifically tied to closing with their in-house or preferred provider.

That's legal. The buyer can still walk into the deal with their own title company; they just may be leaving that specific incentive on the table if they do. It turns the decision into a real trade-off, not a rule violation, and it's exactly the kind of trade-off your clients deserve to understand before they sign anything.

Sometimes that math genuinely favors staying with the builder's provider: the incentive outweighs the price difference. Sometimes it doesn't. The only way to know is to actually compare the numbers, which is a conversation worth having early in a new construction contract, not after the title commitment shows up.

What This Means for Your Next New Construction Client

If you're working buyers in Westminster, Cherry Creek, Downtown Denver, or anywhere else across the metro where new construction is competing with resale inventory this year, a few things are worth building into how you walk clients through a builder contract:

1. Read the incentive language closely. If a closing credit or rate buydown is conditioned on using a specific title company, that should be spelled out in the contract, not implied verbally.
2. Get a second quote before assuming the builder's provider is the only option. A five-minute comparison can tell you whether the incentive is actually worth more than shopping elsewhere.
3. Remember the choice belongs to the buyer, not the builder or even you as the agent. Your role is making sure they know they have one.
4. Ask what's actually included. A builder's preferred provider isn't automatically the wrong choice. Some offer genuinely competitive pricing and faster turnaround on new construction closings specifically, since they handle a high volume of them. The point isn't to steer clients away; it's to make sure they're choosing, not defaulting.

This is a great example of why it helps to loop your title partner in early on a new construction deal, before the title commitment is the first document your client sees. Our team is always glad to run a side-by-side comparison for a buyer weighing a builder's preferred provider against an independent choice, so the decision is based on real numbers instead of assumptions.

Where This Fits Into Denver's New Construction Market Right Now

Builder incentives are showing up across the metro this year as new construction competes more directly with resale for the same buyer pool, a shift worth watching if you read our recent breakdown of why Denver homes are taking longer to sell. Rate buydowns and closing cost credits are becoming a standard part of how builders move standing inventory, which means more of your buyers will run into this exact question over the next several months, not fewer.

None of this is a reason to steer clients away from a builder's preferred provider by default. It's a reason to make sure they're actually deciding, with real numbers in front of them, instead of assuming the paperwork in front of them is the only option. Chicago Title's own reputation with agents and lenders across Colorado has always come down to that kind of straightforward comparison holding up: we're comfortable being shopped against, because we know what we bring to the table.

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Frequently Asked Questions

Can a builder legally require me to use their title company in Colorado?

No. Federal law under RESPA Section 9 prohibits a seller, including a homebuilder, from requiring a buyer to use a specific title insurance company as a condition of the sale. Colorado's Division of Insurance confirms the buyer, as the party paying for the policy, has the right to choose.

If I don't use the builder's preferred title company, do I lose the incentive?

Possibly, depending on how the contract is written. Builders can legally tie a closing cost credit, rate buydown, or upgrade package to using their in-house or preferred provider. That's an incentive, not a requirement. It's worth comparing the value of the incentive against the price of shopping elsewhere before deciding.

How much can title insurance pricing actually vary between companies in Colorado?

Industry sources cite a range of roughly $400 to $2,800 for comparable policies, depending on the property's title history and any discounts available, such as a reissue rate on a recent prior policy. One recent Aurora example saved a seller about $600 simply by comparing quotes.

Does this right to choose apply to resale purchases too, or just new construction?

It applies to any real estate transaction, not just new construction. Whoever is paying for the title insurance policy (buyer or seller, depending on local custom) has the right to select the provider, regardless of what an agent, lender, or seller recommends.

What should I tell a client who's not sure whether to use the builder's title company?

Encourage them to ask for the actual numbers on both sides: what the incentive is worth if they use the builder's provider, and what an independent quote looks like. That comparison, not a general rule of thumb, is what actually answers the question for their specific deal.

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If you're walking a new construction client through this decision right now, I'm happy to help you compare the numbers so they can make the call with real information in front of them. Reach out anytime.

About Brenna Harper Brenna Harper is the Director of Sales Development with Chicago Title, serving Metro Denver. She turns real estate strategy and market intelligence into meaningful business growth for the real estate professionals she works with. Reach her at brenna.harper@ctt.com | 303-748-3965.

The above information is for general informational purposes only and should not be construed as legal advice. Buyers with specific questions about their contract should consult a real estate attorney.