In the state of Texas does an abstract title protect the owner as well as the lender?

In Birmingham, Alabama, the real estate agent usually orders the title policy, and if there is a mortgage involved, the buyer and seller split the cost 50/50. If it is a cash sale, the seller pays for the total policy.

In Illinois the seller's attorney orders and the seller pays for the Owner's Title Insurance and the buyer for the Lender's Title Insurance Policy.

I appreciate everyone's comments so far. Keep them coming. Let's hear from the Midwest and south central regions. (And I'm sure Louisiana does things differently! : )

It appears to me from the postings thus far, which do not seem to represent the Midwest or the central region well, that the buyer's purchase their own policy and the lender's policy whether the closing occurs via an attorney or via a title office, but that the purchaser of the title policy seems to dictate who handles the closing (either lawyer or title co)

When I was licensed in Texas it was customary for the buyer to purchase their own title insurance policy and that of the lenders.

In Florida the custom is for the seller to pay for the buyer's owner's title insurance policy and that always seemed back wards to me. There was a rash of scandals that emerged a few years ago that indicated some Realtors (listing agents) were steering the title business for kick backs from the title companies.

Now that I have an ownership in a title company I see things from an angle that has made me wonder more about this. It makes absolutely no sense for a seller to pay for the costs of a buyer's owner's and lender's title insurance policy but the agents have the seller's paying for it so that the seller (actually the listing agent) can control where the business goes...

Builder's here do not pay for the owner's title policy on behalf of the buyer but still dictate where the deal is closed - clearly a RESPA violation.

Thanks again, keep contributing. I hope others are finding this interesting too.

In Massachusetts, we do not use title companies. We use conveyance (or closing) attorneys chosen by the buyer’s lender. Title insurance protecting the lender is required to be paid, while the buyer’s protection policy is optional. It is customary for the buyer to absorb both of these costs.

California has different conventions on a county-by-county and market-by market basis. Generally, Northern California counties have the Buyer responsible for the Title Insurance, while Southern Califonia allows the Seller that privilege. Best advice is to check with your Escrow Officer when in an "out-of-your-area" transaction. And, of course, as in all aspects of Real Estate transactions, everything is negotiable!

In New Jersey, most closings are settled by an attorney. The attorney for the buyer will choose the title company, and order title. The buyers attorney will forward a copy to the sellers attorney. Rarely does an agent have much, if anything to do with it.

I am definitely curious to hear if anyone has any comment about this.

In Baldwin County, Alabama the Seller pays for the Owner's Title Insurance unless otherwise negotiated differently.

I have found it varies from county to county. In our county it is customary that buyer pays for title, escrow and alta policies. However, it can be negotiated in the contract. It is customary the buyer chooses the title company and in Northern California the title company also handles the escrow.

I am in Marin, CA. We had some big discussions about this.

In Northern Califonia, the custom is that buyers pay for title insurance and buyers pick the title company.

The Buyers gets to choose the title company. The sellers, or Realtors representing sellers, will be in violation of RESPA if the sellers suggest the buyers to choose a certain title company. Although at times, the buyers do go along, especially if there is exchange going on or other complex situations. Just remember that this can be challenged and fined if the sellers require the buyers to use a certain title company.

We had discussons about this, especially during the last few years when it was 'Sellers' Market' because some of the sellers were demanding that buyers use a certain title company when writing offer and buyers would comply because they were afraid of losing the bid.

See quote from HUD:

"Choice of Title Insurer. Under RESPA, the seller may not require you, as a condition of the sale, to purchase title insurance from any particular title company. Generally, your lender will require title insurance from a company that is acceptable to it. In most cases you can shop for and choose a company that meets the lender’s standards"

I am in Ridgefield Connecticut, where we do not use the title company as closing agents. Attorneys do that here, and are paid by the title insurance company to go over the title and sanctify it. The buyer purchases the title policy to protect himself and the lender from any future claims against the title.

California, Sacramento and Placer Counties. Legally, and in practice its negotiable. I always ask the buyer to make the good faith deposit payable to the title company, not to the broker. So , I try to find out from the seller's agent if they have a preference or no.

Not the same on the flip side. The agents presenting offers on my listings often choose an escrow or title company without conferring with me. If my seller has no preference then in deferenence to RESPA I don't either.

Our title companies here provide many agent educational opportunities in a RESPA compliant effort to win the affection of agents. While I appreciate these seminars and classes, they have no effect on my referral of business. The short answer then for me personally is that it is the other agent that chooses.

When I write the offer my buyer usually asks the seller to pay the owners title insurance, and offers to pay lenders policy.

Georgia is one of a few non-judicial foreclosure states whereby closings are performed by attorneys. The title search and insurance are typically ordered by the closing attorney. The cost of lender and/or owner's title insurance can be paid by either party. It is customary in our market for the seller to contribute some amount toward the buyer's closing costs. The buyer can then apply the seller's contribution toward a variety of closing costs including title insurance up to the amount agreed upon. However, most lenders have a limitation on the total amount that a seller can contribute.

Here in the Bay Area in California the buyers pay for the lender's title policy and their own title policy as well if they choose to obtain it. It's also up to either the buyer or the seller to choose the escrow company, there is no absolute answer for that. I have never come upon a situation where the seller per se wants to go with First American and the buyer has a problem with that. Once the escrow office is chosen, the other party generally doesn't care.