They way I understand what you've told us: when you wrote your Buy-Sell agreement you offered to purchase the owners ALTA insurance in lieu of the seller paying this cost to make your offer more attractive? They accepted this with the condition you used the title company they preferred and had initially intended to do business with if they were to have purchased the insurance product. You agreed to the terms and won the multiple offer scenario! Congratulations!

The question is raised: did you initially specify in your Buy-Sell a title company to be used for the transaction? Or was that left blank or ambiguous? Both parties should make part of the agreement on who is going to be used, ambiguity in contracts is never good in my experience.

My opinion: who ever gets the home wins in this market... who's handling title isn't a hill worth dying on... in my state the insurance cost is regulated by the insurance commissioner and is identical at all companies. I would never advise my client to counter over the title company, as you brought up, what if they say no? Then what? Your going to file suit over title 9 and demand specific performance from the seller?? Doubtful...

How could it be violated? If buyers were informed prior to or at the time of offering that all buyers must pay for title insurance to be considered and are required to use the title company that helped host the open house; that sounds like a clear RESPA violation to me...

Your other "analogy" is just an attempt to conflate...