Title Insurance - who is responsible, buyer or seller?

Asked by Terry Yonker, Punta Gorda, FL Sun Jun 10, 2012

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12
Leonajulli, Home Buyer, Fort Worth, TX
Thu Jun 11, 2015
It is more typical for the Buyer to cover the closing costs as those costs cover the appraisal work, origination fees, attorney's fees, and title insurance to name a few things. Of course, who pays what is probably different by state.

Now, the reality that I explain to my clients is that all terms are part of the negotiation. Negotiating a deal is more than just price. It's price, the amount of the consideration deposit, the amount deposited at Purchase and Sale, the length of the contingency period (and the contingencies themselves), time to closing, and any additional terms (such as closing costs) that may come up.

In normal times, most closing costs are the responsibility of the buyer. If a seller agrees to pay 3% closing costs, that is basically 3% off the top of the price you are offering, in addition to the ~6% commission seller is paying to agents.

Reference Link: http://titlecompanies.net/
2 votes
Maggie Hawk, Agent, New Smyrna Beach, FL
Mon Jun 11, 2012
Terry,

Since it's a negotiable item, as both you and Ron have said, local custom usually prevails. Here in my neck of the woods (southeast Volusia County), the Seller usually purchases the title insurance for the Buyer (the "owner's" policy).

When I'm taking a listing, I usually explain to the Seller that, by providing the owner's title insurance policy, they are showing the Buyer that they have clear title to the property (no liens or judgments against it), and are in a position to sell it.

However, that being said, if I'm working with a Buyer who is purchasing a foreclosure, I suggest to the Buyer that he/she pay for the owner's policy, and the associated search and examination, done by an attorney or title company of their choosing, and insist that the search go back beyond the current ownership.

Otherwise, if the lender selling the foreclosure pays for the owner's policy, that lender will only provide a policy that covers their time of ownership (which could be a few months, or even weeks), and offers little real protection to a Buyer.
1 vote
Tammy Hayes, Agent, Port Charlotte, FL
Mon Jun 11, 2012
Title insurance is negotiated on the contract by the buyer and seller. Either one can pay for it. Here is a link to a title insurance calculator if you want to see what the fees would be. http://csbtitle.com/calculator/

Tammy Hayes, Realtor
Green Lion Realty, Port Charlotte, FL
tammyhayesre@gmail.com
1 vote
Ron Thomas, Agent, Fresno, CA
Sun Jun 10, 2012
Traditional is The Seller pays for Owner's Title Policy,
and the Buyer pays for Lender's Title Policy.

That said, anything is negotiable.

Choose a Title Company and go in and meet an Escrow Officer:
They are working for the Principles, bi-laterally.
Ask them to do a hypothetical HUD1, giving them a proximity of the Selling Price;
they will produce a doc that shows what each of you will pay, in two columns.

Good luck and may God bless
1 vote
Terry Yonker, Agent, Punta Gorda, FL
Sun Jun 10, 2012
The title insurance is a negotiated item that can be paid for by the buyer OR seller, depending on local convention. In this part of Charlotte county, convention is that seller pays title, for no other reason than 'thats the way things been done 'round here forever!' Paying for title allows you to typically choose the title agent and therefore work with someone that the listing agent has a track record on and can count on.

If you paid for title insurance when you bought it, you have to reinsure it again when the new buyer takes over. If you have a copy of the policy you may be able to get a reissue credit, but it will still have to be purchased again.
1 vote
Stephanie Jo…, Agent, Tampa, FL
Sun Jun 12, 2016
Well if you are the buyer and sell within 3 years according to State Law then you should receive a discount.
0 votes
Bill.shaughn…, Home Buyer, Punta Gorda, FL
Tue Feb 2, 2016
Often, local custom dictates whether the buyer or seller pays for the premium, but sometimes sellers and buyers negotiate who will pay the premium without regard for local customs and procedures. To get a title insurance quote go here: http://www.entitledirect.com/lp/land?

Go Direct with Entitle Direct Title Insurance - where you can save up to 25% on title insurance.
0 votes
Pete Langlois, Home Buyer, Crystal River, FL
Thu Apr 2, 2015
Title Insurance protects the buyer. It is required by the buyer's lender. Each buyer needs to protect their interests. When was the last time you bought car insurance for another person? Everyone should pay for their own insurance. Of course, if a seller wants to give this away to sweeten the deal, they can.
0 votes
Not a good comparison. Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the "past". Other types of insurance such as auto, life, or health cover you against losses that may occur in the "future". Title insurance does not protect against any future faults, but does protect you from risks or undiscovered interests.
Flag Sun May 3, 2015
Not a good comparison. Title insurance is different from other types of insurance in that it protects buyer, the insured, from a loss that may occur from matters or faults from the "past". Other types of insurance such as auto, life, or health cover you against losses that may occur in the "future". Title insurance does not protect against any future faults, but does protect you from risks or undiscovered interests.
Flag Sun May 3, 2015
Randy and Vi…, Agent, Punta Gorda, FL
Tue Jun 10, 2014
The contract will stipulate who is responsible for the title insurance.
0 votes
Bill Arther, Agent, Punta Gorda, FL
Mon Jun 11, 2012
It's negotiable and I always write my contracts in the best interest of the party that I am representing. If my buyer is presenting a somewhat low offer I might suggest that they pay title and control the closing. If my buyer presents a good offer that is less than full price I generally request the seller pay title if the comps support the offer. If there are multiple offers and it's a great deal I might recommend my buyer pay at least full price and also pay for title/closing. Negotiable itmes are just another tool to accomplish your objective. I use similar somewhat inverse strategies when I am representing the seller...
0 votes
Christopher…, Agent, Tarrytown, NY
Mon Jun 11, 2012
In NY the buyer pays for the title insurance, especially since they are the party thta needs it.

Chris
0 votes
Darrell D. D…, Agent, Schertz, TX
Sun Jun 10, 2012
Short answer - whoever is designated to pay the policy on the contract. In other words, everything is negotiable.
0 votes
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