Paying Buyer versus Lender Title Insurance
 

I am closing on selling my house with TV. The sales contract states that the seller will pay for the buyer’s title insurance. And that the buyer will pay for the lender’s title insurance.

I have received my closing disclosure, and the disclosure identifies the seller (me) paying for both buyer’s and lender’s title insurance. I questioned the title company regarding this, and the title company assured me that both amounts identified on the disclosure were actually buyer’s title insurance.

The title company stated that they have to identify the buyer’s title insurance in two different amounts and on two different lines on the disclosure form. The smaller amount is identified as “buyer’s title insurance” and the larger amount is identified as “lender’s title insurance”.

I provided the title company with the sales contract showing that the buyer is to pay lender’s title insurance. I am only to pay for the buyer’s title insurance. The title company stated that both amounts were my responsibility, and the title company has to identify a portion of the buyer’s title insurance as “lender’s title insurance” due to government standards.

The sales company is TV. The buyer’s lender is Citizens First. And the title company is Peninsula Land and Title.

I have discussed this with some others, two of whom have sold houses in TV (one within the last month). And both have had similar experiences. One seller had to close and paid both fees. The other seller refused to close the transaction - this transaction ultimately closed with the realtor reimbursing the fees to the seller to facilitate the closing. I fall into the category of having to close.

I Searched TOTV, and did not see any other posts referencing this issue. Given my discussions have identified two additional people, I’m curious to learn if there are others with similar experiences.

My understanding is that in Florida the seller must pay for the title insurance covering the buyer.

Google:
In Florida, an Owner's Title Insurance Policy is typically paid for by the seller, however, these fees can be negotiated in a sales contract. If the seller pays for the owner's title policy it is also typical for the seller to select the title agency.


When I, Velvet, bought my house the seller paid title insurance (resale home) which says they are in position to sell their house in the first place. They chose the agency, Freedom Title. I chose not to have buyer’s title insurance. But I had no mortgage. I’ll get my title insurance when I am selling.

If you are being pushed to do these things be prepared to walk away. It’s your money. You decide what you pay for. There are so many similar homes in TV you’ll find another one, or a better one.

Very confusing. If you agreed to pay for a buyer's title insurance policy, I would shop around and find a title insurance policy and get a price. If you are paying for it, you should have the right to select the insurance company. I would refuse to pay for any title insurance policy required by the lender. But, I would never have agreed to pay for a buyer's or lender's policy in the first place.

When I bought my house from The Villages, the buyer's title insurance policy was optional, and I paid for it. A got a letter from The Villages giving me the option to buy the policy or to decline it. It says that I could either write a separate check to the title company or they could include the amount in my payment at the closing. But, I definitely paid for the insurance policy. Some buyers decide not to buy a policy. You may be thinking about the cost to search the title and to deliver a clear title to the buyer, but that is not a title insurance policy.

I think you are confusing title "insurance" with a title "search". A buyer's title insurance policy is a lifetime policy that will protect the buyer/owner for as long as he/she owns the property. You can make a claim against the policy years after you bought the property. But, if the title company who handles the closing makes a mistake and doesn't deliver a clear title to you, your only recourse is to sue them, if you don't buy a title insurance policy. But the insurance policy is optional, and some buyers do not buy a policy. But who pays for it on the settlement papers is irrelevant. As a seller, I would never agree to pay for the buyer's title insurance.

Possibly, the seller had to show they clearly owned title to sell the house. And there were no liens against the property. It sounded like insurance as I was protected against any past claims.

You might want to check with a couple other title companies to see how they would handle it based on the language in your contract of sale. If they would do the same thing that is what it is although to me a buyer's policy is a buyer's policy and a lender's policy is a lender's policy. Also it seems to me that just about everything is handled a little differently in The Villages.

Practices vary from state to state but except in Sarasota County in Florida the seller customarily chooses the title company and pays for the buyer's title policy.

Not that is is likely to be a concern for the OP but title insurance companies do go out of business every once in a while. I owned several commercial properties in Albuquerque, NM when the title insurance company I had used to close became an issue to my lender, not the bank mentioned in this article, but another. The bank holding my mortgages insisted I reinsure every single property with a new policy which I did. It was unexpected and expensive but necessary. Big whoop! I got the reissue rate. Title Insurers''' Low Reserves Stir Worry - The New York Times

You are right that that is the FL. However, TV makes their own rules.

What I have never understood about any of this is that when buying a home you pay the attorney to do a title search. So when you go to sell the home if they find a problem with the title shouldn’t the attorney who did the original search be liable to make the title good. To me this is just a money making scheme.

I am a Realtor and never had that issue. Both Title Insurances are listed as a Buyers cost abnd then the Lenders Title is listed as a credit, so it washes out the Lenders Title. This has to be done when doing a Mortgage. If it is a Cash Deal then it is just listed as a Credit. Possibly your Lender is not familiar with Florida as to this process. I know I was not coming from doing Mortgages in NYS.

Owners Title Policy is typically paid by a Seller on a pre-owned home in most counties in Florida. It insures clear title to the buyer of the property. Lenders Title Insurance insures the Buyers Lender of Clear Title and is the responsibility of the borrower or buyer and not the seller.

You are correct that the attorney who does the title search is liable, but you would need to hire another attorney to sue the title seach attorney. Good luck with that. If you have a title insurance policy, you just file a claim against the policy like you would with homeowners insurance. But, it is a money making scheme, like homeowners and auto insurance. A title insurance policy is only paid for once, and it covers you for life, unlike homeowners and auto insurance that you need to pay for year after year.

It's a contract - Florida can say what must be paid but the two parties to the contract can specify who pays. Standard contracts can either be signed or changed.
Complaining on the internet won't change anything - just negotiation will.

Many closing expenses and actions are negotiable between buyer and seller. Once you have a breakdown of what the Owner policy cost is, and the Lender policy cost is, tell the realtor you want there to be an adjustment on the closing statement from the seller to you of the Owner policy cost.