Who typically pays for the buyer's owner's policy of title insurance?

In real estate transactions, the responsibility for paying the buyer's owner's policy of title insurance is typically assigned to the seller. The rationale behind this practice stems from the standard convention that sellers provide title insurance as a means to assure buyers that the property is free from any potential claims or liens that could arise. This form of insurance protects the buyer from unforeseen issues that may affect their ownership interests after the transaction closes.

Sellers often include the cost of the buyer's owner's policy in the overall negotiations of the sale, because providing title insurance can facilitate a smoother transaction and reassure the buyer about the title's validity. By paying for this policy, the seller can enhance the attractiveness of their property to potential buyers, as it mitigates some of the risks associated with purchasing real estate.

In contrast, the lender typically requires a lender's policy of title insurance, which serves to protect their financial investment in the property, but does not cover the buyer's interests. Likewise, the cost burden on the closing agent pertains to administrative duties, not to the actual payment of title insurance policies. This reinforces the common practice that sellers are responsible for the buyer’s owner's policy.