Thursday, January 15, 2009

Who Is Paying for the Title Insurance and Closing Fee?

If you have a deal that involves a bank-owned or a HUD home, make sure it is clear who is paying for the owner's title insurance policy and who is paying for the real estate closing fee. In many of the sales contracts we see, the seller (the bank or HUD) states that they will not pay for these fees.

In a typical Colorado transaction, the seller pays for the owner's title policy and for half of the real estate closing fee. If the buyer is going to be responsible for these two additional fees, then it will increase the funds required to close. If the buyer does not have much money in the bank, the need for those additional funds could affect the approval of the loan.

This problem can almost always be overcome, but being aware of it in the negotiation phase is far better than having to address it after a contract has already been signed.

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