Who typically pays for title insurance in a real estate transaction?

In a real estate transaction, it is common for the seller to cover the cost of the owner's title insurance policy, while the buyer generally pays for the lender's title insurance policy. This practice reflects the typical roles and interests of each party involved. The owner's policy protects the buyer, ensuring that their ownership is secure from any unforeseen claims or issues that may arise regarding the property title. Meanwhile, the lender's policy safeguards the lender's interest in the property, covering their investment in the event of any title disputes.

Local customs and negotiations can sometimes influence who pays for what in specific transactions, but the stated division of responsibility is widely accepted, making it a standard practice in many real estate markets. This helps to clarify financial responsibilities early in the transaction and establishes the expectations for both the buyer and the seller regarding title insurance.