Who Pays for Title Insurance?
If you find that you have somehow landed on this article, chances are, you want to know the answer to the question ‘Who pays for title insurance?’ Before we get straight to the answer, are you up to date with what title insurance is and who does title insurance protect?
Here is the straight and to the point answer on those two questions: title insurance protects home buyers and/or lenders from any type of loss that may occur post real estate settlement by providing coverage (usually in the amount of the purchase price of the property) when a claim or defect is found in the title of the property.
What Would Happen If You Did Not Have Title Insurance?
To put it plainly, if title insurance was not purchased before settlement, and a claim was made against the property, the new home buyers (or even the lender) would have to pay thousands of dollars in attorney fees. Now, if the claim being made is found to be valid, the home buyer could lose the property completely.
Not so great, right? Which is why we highly recommend purchasing title insurance for a one-time small fee to protect yourself and the property. That goes for lenders too!
So, Who Ends Up Paying?
The buyer decides whether to pay for title insurance/buy an owner’s policy on the property. The seller does not pay for title insurance. However, as the home buyer, we highly recommend that you ask the seller if he or she previously purchased a title insurance policy on the property. And if the seller did purchase title insurance in the past, you can always ask them for the name of the company that issued the policy.
As the home buyer, you also have the right to pick your settlement agent as well as title insurer. But sometimes, your agent can easily recommend a title company they have worked with before to help take one more stressors off your plate.
Now that you know the answer to ‘Who pays for title insurance?’, please feel free to reach out to your closest Madison Settlement Services anytime you have questions or need assistance.