YOU ASK:

Who pays for title insurance on the short sale of a home in Florida?

WE ANSWER:

In Florida, the seller usually pays for the premiums of the owner's title insurance policy.

However, for a short sale, it really would depend on the situation. You must understand that with a short sale, the owner (along with the bank who provided the mortgage) is trying to unload the house and sell it for a price that is lower than its original purchase price. This is because the one who bought the house can't afford to pay the mortgage amortizations anymore.

The borrower may try to sweeten the pot to speed up the sale by offering to pay for the title insurance. Or, because he can't afford to do so, he may refuse to pay for the title insurance.

In a short sale, the borrower is at the losing end, so the second scenario may be more likely, since the borrower does not profit from the sale. He just wants to settle with the bank in order to minimize the damage in his credit rating.

If you are buying property by participating in a short sale, be prepared to pay for the title insurance cost. The seller may reason out that since you're buying the property for a price much lower than its original price, you will still come out as getting a bargain.

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