Who Pays for Title Insurance in a Home Sale: Buyer or Seller?

"When you sell a home, you may ask who pays for title insurance? Usually, the seller is responsible for the owner's title insurance policy, while the buyer covers the lender's policy. However, this division of costs can change based on local customs and what is agreed upon in the sales contract. Whether you're selling a home in , , or , this Redfin guide will walk you through who pays for title insurance, how it protects both parties, and what to expect at closing."

"What is title insurance? Title insurance provides crucial protection for both homeowners and against possible problems with a property's ownership history. This coverage ensures confidence that the title is valid and transferable, guarding against issues such as boundary disputes, unpaid taxes, or undisclosed heirs. Owner's Policy: Covers the homeowner's investment and protects against title defects. Lender's Policy: Protects the mortgage lender's interest in the property."

"Regional differences in payment responsibilities Payment responsibilities for title insurance can vary widely by region, depending on local traditions and market norms. For instance: Buyer-pays states: In places like California and , the buyer typically handles both policies. Split-cost regions: In some markets, buyers and sellers split expenses like home warranties, inspections, or closing costs-negotiating who pays what based on who benefits most from the coverage."

Title insurance protects property ownership by covering defects in a title and ensuring transferability, guarding against boundary disputes, unpaid taxes, and undisclosed heirs. An owner's policy safeguards the homeowner's investment, while a lender's policy protects the mortgage lender's interest. Typically, sellers pay for the owner's policy and buyers pay for the lender's policy, but who pays can vary by local custom and negotiation. Regional norms differ: some states often have buyers pay both policies, while other markets split costs or negotiate responsibilities based on who benefits most. Review and negotiate payment terms before closing.

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