My seller client didn't have an RPR and compliance, but the buyer agreed to accept Title Insurance in lieu. The contract said, "Seller will pay for Buyer's Title Insurance."

Typically, a standard title insurance policy for a property under $500,000 where the policy covers both a lender and the buyer is around $229. BUT, that is not always the case. We have a sale closing this week where the sale price is $145,000. The buyer's lawyer always orders the Title Insurance, and they told us the policy will cost $549!

What don't the Title Insurance underwriters like about this deal? I don't know the answer. I'm going to ask, but because of the way the contract is written, our seller client is on the hook to pay the policy premium pretty much whatever the cost.

Sellers' realtors may want to consider writing that Title Insurance clause a little differently. Something like "Seller will pay for Buyer's Title Insurance to a maximum of $250" might be beneficial. 

If, because of the particular deal, the Title Insurance policy is more, the buyer or buyer's lawyer can advise, and this can be negotiated.

On the other side, if you are the Buyers' realtor, you want the Seller to pay for the Title Insurance cost no matter the cost, so you would resist a maximum.

Protect yourself.

Cheers,

Barry

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