Kerrie: I just had a call from a real estate agent asking who controls the choice of closing agent for the transaction – buyer, seller or lender. I think when she says “buyer” or “seller” she means the buyer’s agent or the seller’s agent.

Jim: Ah yes, this question has perplexed our industry for many years.

Kerrie: Don’t you dare say since the Middle Ages.

Jim: No, not quite that long. Many refer to the “golden rule” which is: “He who has the gold, makes the rules.” Under that theory, the lender seems to control around here. In other parts of the state where the seller is paying for the buyer’s owner’s policy, the seller usually gets the choice.

Kerrie: What about the buyer? The closing is generally about the buyer’s loan and the conveyance of the deed if the transaction is a sale, isn’t it?

Jim: Some buyers would dispute that as they watch all of the other parties leave the closing table with a check funded by them. But when all else fails, read the law. Everyone knows that RESPA prohibits the seller from requiring a certain closing agent, but there are several sections of the Ohio Revised Code that are also relevant to this question, but very few real estate professionals seem to know about them.

Kerrie: So, what are they?

Jim: Well, Section 3901.211 of the Revised Code states that no person as a condition of lending money can require the borrower to acquire any insurance policy through a particular insurer or agent. The section goes on for three pages of “thou shalt nots,” and concludes that a violation of this section is “an unfair or deceptive act or practice.” Where have we seen that language before?

Kerrie: Why, the Ohio Consumer Sales Practices Act as recently amended with respect to mortgage brokers and title insurance agents. So what is the second section?

Jim: Glad you asked. It is even more interesting. Section 3933.04 of the Revised Code provides that no person, firm, etc., engaged in selling real property, and no trustee, director, officer, agent, or other employee of any such person, firm, etc., shall require, as a condition precedent to the sale of such property, that the person, purchasing the property negotiate any policy of insurance or renewal thereof covering the property through a particular insurance company, agent, solicitor, or broker.

Kerrie: Well, that seems to throw out the seller and the seller’s agent.

Jim: And the buyer’s agent if there is a dual agency situation.

Kerrie: So it seems like the answer to the question put to me is – the buyer.

Jim: So it would seem.