Who pays for title insurance? - Posted by John

Real Estate Investing Real Estate Law
#1

Posted by Jimmy on May 21, 2006 at 08:36:10:

Maybe I was a little too broad with my comment about SF Bay Area. I sold my house in Contra Costa County last year, and the buyer paid for title. and I have sold properties in estates (I’m an atty) in San Francisco (2004) Menlo Park (2006) a 4-plex in San Carlos (2004), and the buyers footed the bill each time.

I think it has more to do with the relative “heat index” of the particular market. Except for the 2006 Menlo sale, the others were all in hot markets, where sellers held most of the cards. not sure why our Menlo buyer did not push for us to pay for title. We would have been willing, as Menlo had weakened considerably between mid-2004 and early-2006.

and I bet that a lot of buyers in San Jose and vicinity paid for title when the market was raging from 1998-2004. but I was not a party to any deals there, so I am just guessing

#2

Who pays for title insurance? - Posted by John

Posted by John on May 18, 2006 at 06:45:03:

I have bought properties now in 3 states. During closings in VA the settlement agent/attorney had title insurance on HUD-1 to be paid by the buyer(me). I just came from a closing in PA where the attorney had title insurance paid for by the seller. I did not say anything then but after the closing I asked the attorney. His explaination was; Seller has to give clear title and the insurance covers him and title while he owned and before, therefore it is the sellers responsibility. It makes sense to me. I asked the title/settlement company here in VA that i use and their reply was since it was required by my lender it was my expense.

This is a new glitch to me. Has anyone else dealt with this and how was it handled?
Thanks

#3

Varies by region and Negotiable - Posted by Jimmy

Posted by Jimmy on May 20, 2006 at 07:49:01:

In the San Francisco Bay Area, it is customary (recently, anyway) that the buyer paid for the title policy.

In Texas, the opposite rules the day.

and everywhere, it is a negoiable item. if you have the upper hand in terms of bargaining power, definitely try to get the other side to pay title (and everything else).

#4

Re: Who pays for title insurance? - Posted by BTI

Posted by BTI on May 18, 2006 at 09:41:00:

John

I don’t know of any state that has a law declaring who has to pay the title insurance. Every where I’ve done business it was a matter of custom, and in general the prevailing theory is if your paying it when you buy, then your not paying it when you sell, and it all sort of balances out.

That said, I don’t care about custom, I put who pays what into the contract and try to get the other guy to cover the cost, if that meets custom at the moment fine, if not custom is not law and what you can negotiate controls the game.

In some areas I’ve noticed agents and buyers only fill out a simple binder because of their simple minds and then lawyers actually draw up the contract, and do the escrow. Its been my experience these lawyers passed the bar exam but weren’t bright enough to practice another area of law and need to be reminded that their job is to put together what the buyer and seller want, not just to rubber stamp the same transaction over and over.

BTI

#5

Re: Varies by region and Negotiable - Posted by BTI

Posted by BTI on May 20, 2006 at 16:11:13:

Jimmy

Just for the record, SF Bay area includes Santa Clara County and that isn’t the custom there.

BTI

#6

Re: Who pays for title insurance? - Posted by kitty

Posted by kitty on April 26, 2007 at 15:13:56:

Can title insurance be purchased when you are buying a home on article of agreement/land contract, long before closing?