In Florida, the choice of whether the buyer or seller should designate the closing agent and pay for the owner policy is a completely negotiable item. The common standard in our region is for the buyer to pick and pay of the owner title policy (and lender policy if applicable). Obviously, an accurate title search and competent title review are vital components to protecting the buyer against financial loss from title defects, which is why the buyer is often designated to select and pay for the cost of the service.
However, it is important to remember that just because something is standard practice does not necessarily mean that everyone else should always follow suit. In fact, there are numerous instances where the seller would receive great benefit from controlling the closing. The following examples illustrate reasons why the Seller may want to consider selecting and paying for the cost of the service:
- The seller wants to insure that its obligations with regard to the property are satisfied in full by the closing agent (note, the failure to properly and/or timely pay a lien/mortgage, could result in the seller continuing to be responsible for accrued interest, late fees, and penalties);
- The seller wants to make sure that the documents he/she are signing are customary and comply with the terms of the contract;
- The seller wants to make sure that he/she is not being asked to make promises or representations that are not consistent with/beyond the scope of the contract;
- The seller wants to make sure that he/she is not being asked to sell/convey more than what they expected when executing the contract;
- The seller wants to make sure that the proration of taxes, assessments, special assessments, rents, ect., are being properly accounted for on the closing statement;
- The seller wants to make sure that the closing takes place timely in an effort to help better coordinate their future purchase/move.
As you can see in the above examples, there are numerous instances as to why the seller may want to select and pay for the cost of title services. With that being said, we recognize the importance of wanting to keep closings costs down and why parties wish to shift the cost of the owner policy and closing fee to the opposite side of the transaction. The purpose of this blog is to simply highlight some instances where the seller may want to think twice before glancing over that particular section of the contract!
As always, we recommend consulting with your local real estate attorney should you have any questions as to why it may be beneficial for you to designate the closing agent and pay for the owner policy.
Berlin Patten Ebling, PLLC
Article Authored by William McComb, Esq. firstname.lastname@example.org
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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