Who Pays Title Insurance?
Working on my first HUD-1...oh the joy!! 
I've read all the posts in reference to HUD-1s and haven't found an answer - Who pays for title insurance - the bank or the buyer (me or whoever we assign the contract to)?
Thanks!
posherov
Buyer always buys title insurance. You can't insure something unless you have what they call an insurable interest in the property. It's no different then car insurance. Only the owner of the car is interested in it's well being. Same thing w/ the title to the house. Once the seller is paid, he could care less what happens to the title.
Title insurance is not required. Only recommended.
Is title insurance the same is a title search? What does it generally cost?
Thanks in advance.
i believe i paid in the range of $200+-on my last prop......ggod luck...kenmax
When you are at settlement and are employing a Title Co. or, if you are closing at the Title Co. or if you are in an Escrow and are employing a Title Co. you might like to ask them for a rate schedule and with this in your possession you can use it for all future costings. $100,000 sales price, about $600 to $500 increases about $5.00 per $1,000. This is rough. Very rough.
Enjoy. Lucius
Is the buyer getting a conventional mortgage to buy this property? If so, title insurance is requirement for the lender, but optional for the buyer. It costs usually any where between $1.50 to $3.00 per thousand dollars of the loan amount. So, total title insurance cost would be $400 ($100,000 prop $2 per thousand), if the buyer decides to get title insurance for himself along with lender's coverage.
It is the buyer's responsiblity to pay for it, but the seller can also pay for it, It all depends on what the contract says.
[ Edited by SmileyFace on Date 04/12/2004 ]
The title insurance is paid by the seller in most instances, they are insuring that you receive clear title. The buyer is only paying a portion ( about one fourth of what the seller is paying). Make sure your purchase contract states who pays for what. If you are refinancing, however, the borrower is paying the whole amount. The rate can be less if the refinanace was done soon after the purchase, you are charged "short term rates."
Thank you for all your responses! I'm afraid I'm still a little hazy as wstone1
suggests that the BUYER always pays for title insurance, some of you say that "it depends" and JaneSherman
says that "title insurance is paid for by SELLER in most instances." LOL
This is a cash deal - so no lender is involved. I'm simply wondering if most of you, when doing a SS ask the bank to pay for title insurance or if you pay for it yourself? AND how many of you actually ended up getting title insurance when you bought the property for cash with plans of rehabbing it yourself.
Thanks again!
posherov
In a cash deal title insurance is not required. However, I would recomend that you as the buyer always get title insurance. Generally the buyer pays for title insurance but everything is negotiable
BTW if you borrow the money the Bank will make you pay for their title insurance, which does not cover you. There again always get your own insurance.
I had a friend buy a piece of rental property and he decided to not buy title insurance. After about 2 months of ownership a sibling of the seller came up claiming the seller did not have the authority to sell the house. After a long court battle my friend lost the house and over $25,000.00 in legal expenses. Title insurance may be expensive,but not as expensive as a legal battle over title.
I agree with the previous post. If you are buyer, you should seriously consider buying title insurance. Title insurance is not seller's responsibility, but buyers, but still opitional for buyers.
Title insurance rates are regulated by the Insurance Commissioner of your state. A bank is not going to pay for title insurance unless you are getting a no fees loan. On a sale the split of who pays for title insurance is negotiable and should have been laid out in detail on your purchase contract.
On a refinance the title insurance would be 100% yours unless as in above lender in doing no cost no fee deal such as home equity line of credit. Your deal is all cash so there is nothing requiring title insurance excepting common sense- if there are liens or the title has some cloud or there are we'll say problems with the title record history, the " problems" stay stuck on the property they do not go away. If you buy a property all cash you don't have to pay for title insurance but you would want to ok?
**** No Advertising allowed within your posts, please. Thank You *****[ Edited by rajwarrior on Date 04/13/2004 ]
Thanks again for all the feedback. It sounds prudent, so we will be getting Title Insurance on this property if we ever do get to close.
posherov
Title insurance is always a good thing.
Last year I had a small issue with a property I was selling.
I paid cash for the property five years earlier. At the time I bought it, there was a mortgage on the property. Although that mortgage was paid off when I bought it, the release for that mortgage was never recorded.
That particular mortgage company was no longer in business so getting a release seemed close to impossible.
Fortunately I had title insurance and in this instance I used it to clear up this mess -- A minor issue with title insurance, which could have become a major issue without it.
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In Illinois, title insurance is traditionally paid by the seller because they are promissing clear title to the property. However, payment of the closing costs should be stipulated in the contract. It doesn't hurt to ask the seller to pay all of the closing costs. If they don't like it, they can change it in the counter offer if they wish.
8-)
Suntzu18
is different than insurance. The insurance protects you from potential problems with the title of the property.
Title research (letter, "peak"
The research is simply the information that the title company was able to dig up on the property which allows them to decide if they will offer you the insurance.
Title research can generally run $50 - $150 .
If you develop a working relationship with your title company & bring them plenty of business, many investors get this done free and can get "preferred" rates for the insurance!
I've been told that title insurance is a very lucrative business (how many actual problems have you all heard of - sure , scary problems but a low %. Also a necessary, cost of doing business, thing).
Kelly(WI)