YOU ASK:

Who pays title insurance at closing: the buyer or the seller?

WE ANSWER:

It really depends on the negotiation between the two parties - the seller and the buyer.

There are no cut and dried rules about who pays for which closing cost, although there are some customs that are practiced with different states.

Generally, the buyer is the one expected to pay for title insurance. This is because it is his interest that is being protected by the policy. The seller relinquishes and transfers the ownership to the buyer. Thus, whatever claims about the property that will arise, the buyer will be the one who will face these claims, as well as the legal costs and the possibility of loss in case he loses out to the claimants.

As a counterpart, the seller will pay for costs such as the survey fees.

That said, as a buyer, you can always try to negotiate and if the seller agrees to take up this cost, then good for you.

You should remember that there are a lot of costs involved at closing, thus you should talk it out with the seller so that you can agree as to who will pay which cost. These include loan origination fees, lender's points, loan processing and application fees, credit reports, lender's underwriting, appraisal and document preparation fee, as well as mortgage insurance.

If the buyer is the one paying, we recommend that he purchase the owner's title insurance and the lender's title insurance from the same insurance company, so that he can save up on costs.

The discussion above refers to the homeowners title insurance. Of course, when it comes to lender's title insurance, it is usually the buyer who pays, since he is the one applying for a mortgage or a loan. The bank or lending institution will require that you buy this coverage as a requirement for them to process your loan.

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