Home Selling in Bellevue>Question Details

Alex Leavitt, Home Seller in Bellevue, WA

Does seller need to have Title Ins? Who pays?

Asked by Alex Leavitt, Bellevue, WA Fri Jun 5, 2009

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Alex, typically the seller pays for the owners title insurance policy and the buyer pays for the lenders title policy if they have financing to purchase to property. This is because the seller is proving the the buyer that the title is "free and clear" and the buyer is doing the same for the lender. The owners policy is more expensive than the lenders policy. The lenders policy is reduced because it is a "second policy" being issued after the owners policy (simultaneous issue). There are also different coverage amounts with owners policies as well. I've linked to a rate calculator below where you can enter sales price and/or loan amounts for the King County area.
Web Reference: http://talonnw.com/rates/
0 votes Thank Flag Link Sat Jul 3, 2010
Alex,

You got great infomation below and I would have answered your question the same as Chris from AZ.
0 votes Thank Flag Link Tue Jul 28, 2009
Kary,

North East Coast many of the Deed descriptions were metes and bounds "from the big oak to the big rock" :) fun stuff :)
0 votes Thank Flag Link Fri Jun 5, 2009
Back in my law school days I volunteered at Evergreen Legal Services, and because it was a volunteer position, with my time not costing them anything, they had me do some hands on research of very old property records. Nothing from the 1800's mind you, but there were old surveys that referenced trees and other things I couldn't locate at the time.
0 votes Thank Flag Link Fri Jun 5, 2009
Hi Kary,

I mentioned that because while the questioner is local, Trulia is national. In many parts of the Country, Title is done much differently than it is here. I was surprised they didn't do full Title Plant searches here when I arrived in Seattle several years ago. I miss them. They were very interesting, especially in Philly with its history.

I used to get Wills from the 1800s and even earlier when I worked in Philly. They were mega cool big parchment things tied with ribbon. Very cool document review...
0 votes Thank Flag Link Fri Jun 5, 2009
Beyond Ardell's more detailed answer, the title insurance is also how the seller proves to the buyer that they have clear title. The buyer isn't likely to just take the seller's word on that. Absent title insurance, the buyer would need to go search county records to try to find out, and if they made a mistake in searching, they'd have no recourse. And keep in mind the county recorder is not the only place you'd need to search.

Years ago I actually did see someone do just that! Rather than call up a title company, they did their own search. Totally crazy.
0 votes Thank Flag Link Fri Jun 5, 2009
Alex,

1) Agent for the Seller orders Preliminary Title in advance of an offer as "Title" services are more than simply "insurance". Agents review the Title Report for unusual easements or encroachments or liens, etc. Often the buyer reserves the right to cancel the contract after reviewing that same Title Report, so best to order it in advance of having an offer, and have it ready for the buyer's review. There is often no charge for this portion of the service, but there may be a cancellation fee if you do not sell eventually.

2) Buyer usually chooses the Escrow Company and uses the seller's choice of Title Company, since it was "pre-ordered" If it wasn't pre"ordered as shown in 1) then often the buyer may choose both. The buyer's name is "added" to the Pre-liminary Title Order for the insurance purposes. Buyer is given a copy of the report per 1) above for review. Whether or not they have the right to cancel after reading it depends on whether or not a Form 22T was included in the offer and accepted by the seller.

3) Seller pays "Owner's Title Insurance" as it is the seller's customary means of conveying "clear title" in the Seattle Area (not everywhere in the Country).

4) If the buyer is paying cash, there is no requirement for the buyer to have separate Title Insurance. If the purchase is Financed and the lender requires "Lender's Title Insurance" (which most if not all do), then the buyer pays for that portion required by the buyer's lender

Customary Escrow Fees (separate from Title costs) are usually split 50/50 between the buyer and the seller in our area by standard contract agreement, unless that provision is negotiated and changed...and most often is not.

Besides Title and Escrow fees, excise tax and commissions are the remainder of most of the cost...total cost for seller is usually between 8% and 9% total including excise tax and other costs of sale.

Hope that is helpful
0 votes Thank Flag Link Fri Jun 5, 2009
As mentioned, the seller pays for the buyer's policy and the buyer pays for the lender's policy.

I'd dispute the claim that the seller has no need for it. They typically sell under a warranty deed, and that means they have continued liaiblity for claims against the property. Whether the title insurance company has subrogation rights against the seller is another issue.
0 votes Thank Flag Link Fri Jun 5, 2009
Alex, Typically speaking the seller buys title insurance for the buyer, and the buyer buys title insurance for their lender. The seller has no need for title tinsurance as they are conveying the property. This is why title and escrow companies handle the sale. This is usually how it works, but sometimes closing costs are divided differently based on the sales contract. Hope this helps!
0 votes Thank Flag Link Fri Jun 5, 2009
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