Who typically purchases owner's title insurance in a residential purchase?

Who typically purchases owner's title insurance in a residential purchase?

• A. The Lender
• B. The Real Estate Agent
• C. The Buyer
• D. The Seller

Answer: (C)

Owner's title insurance protects the buyer’s ownership rights by covering defects in the title that could arise from past events or records. Because it safeguards the buyer’s equity in the home, the policy is typically purchased and paid for by the buyer as part of the closing costs. A separate lender’s title policy protects the lender’s interest and is usually required by the lender, with that cost also arising at closing but tied to the loan. While there can be negotiations where the seller contributes, the standard practice is that the buyer purchases the owner’s title insurance.

Owner's title insurance protects the buyer’s ownership rights by covering defects in the title that could arise from past events or records. Because it safeguards the buyer’s equity in the home, the policy is typically purchased and paid for by the buyer as part of the closing costs. A separate lender’s title policy protects the lender’s interest and is usually required by the lender, with that cost also arising at closing but tied to the loan. While there can be negotiations where the seller contributes, the standard practice is that the buyer purchases the owner’s title insurance.