Which entity typically pays for title insurance in a real estate transaction?

In a real estate transaction, typically, the seller pays for title insurance. This practice is commonly established in local customs and real estate practices. Title insurance protects the buyer and the lender against any potential defects in the title that may arise after the sale. By having the seller cover this cost, the buyer can proceed with the transaction with added assurance that any issues with the title will be addressed.

The reasoning behind the seller covering the title insurance is often tied to the desire to provide a clearer title to potential buyers, which is crucial in making the property more marketable. In many jurisdictions, the seller's willingness to pay for title insurance can help facilitate a smoother transaction and may even be a point of negotiation in the sale process.

While the buyer, lender, and real estate agent have involvement in the transaction, their typical responsibilities do not include covering the cost of title insurance in the way the seller does. This also helps delineate the roles and financial responsibilities among the parties involved in the sale.