Are you assisting a client with a home purchase in Florida? Or Are you planning to buy a home in Florida?
Payers for owner’s title insurance can vary widely by county. Stay informed to guide your client's investment decisions and make the best choice for your next purchase!
The customary party responsible for covering the owner's title insurance policy premium in residential transactions across Florida can differ from county to county. In some instances, the division of this expense hinges upon the specific location of the property within a county. While real estate contract terms are typically open to negotiation, certain closing costs traditionally fall under the responsibility of either the buyer or the seller.
Regarding the payment of documentary stamp tax on the deed in residential transactions, there is a unanimous agreement that this fee is borne by the seller. This practice likely originated from the seller's obligation to transfer title to the buyer, a standard contractual duty observed in most residential contracts widely utilized in Florida.
The party liable for the owner's title insurance policy in residential transactions varies across the state. Out of the 67 counties surveyed, 44 are identified as seller-pay counties, 22 as buyer-pay counties, with one county exhibiting a division on this matter. Monroe County, known for its geographical uniqueness, showcases a corresponding diversity in its customs. While Islamorada and the Upper Keys follow the buyer-pay tradition of neighboring counties to the north, Marathon and the Middle Keys adhere to seller-pay practices, and Key West and the Lower Keys exhibit a mix of seller-pay and buyer-pay customs.
Many respondents to the survey emphasize that even in counties with established seller-pay or buyer-pay norms, negotiations between parties regarding payment for the owner's title insurance policy premium are increasingly common. Additionally, it's noted that contracts drafted by developers and financial institutions often deviate from county norms concerning payment terms for the owner's title insurance premium.
For instance, the Sales Contract (Residential Improved Property) of the Naples Area Board of Realtors® and Association of Real Estate Professionals, Inc.® (NABOR) stipulates that in Lee or Charlotte Counties, traditional seller-pay counties, the seller covers the premium for the owner's title insurance policy issued by a title insurance agent selected by the buyer. This contractual provision grants the buyer the authority to choose the title insurance agent, despite the prevailing custom in those counties.
In contrast to residential transactions, the customary allocation of the documentary stamp tax and owner's title insurance premium in commercial real estate transactions remains inconclusive in the survey responses. This ambiguity stems from the heightened likelihood of negotiations between parties or their legal representatives in commercial sales.
In conclusion, while real estate contracts in Florida are always open to negotiation, knowing the traditional allocation of costs can significantly impact the transaction process. The varying practices across Florida's counties regarding who pays the owner's title insurance policy premium illustrate the diverse and localized nature of the real estate market. Both buyers and sellers should seek expert local advice to navigate these traditions effectively, ensuring a fair and smooth transaction. Whether dealing with the split practices in Monroe County or the more straightforward customs in other areas, being informed and prepared can make all the difference in achieving a successful real estate transaction.
NOTE: This article offers insights into the customs across Florida's 67 counties regarding title insurance payment, without prescribing which party should bear the cost. As an ATIF Director wisely said, 'EPIN... Every Penny Is Negotiable.
List of Counties in Florida and Who Pays for the Title Insurance
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