The Seller Insures the Buyer (Seller’s Policy)

Just as you paid the title company to insure the lender against the above title problems, the sellers buy a policy guaranteeing title to you as a buyer. This is normally one of the sellers’ closing costs, and their title policy typically runs about 40 percent more than the lender policy. Title insurance costs vary from state to state. Some states set the rates, others require that insurers file their rates with their state department of insurance, and some don’t regulate the fees. In Iowa, homebuyers typically purchase a title-warranty certificate from the Iowa Finance Authority. You get the same coverage as title insurance at a fraction of the cost. Ask your realtor or mortgage lender what the norm is in your state.