Ordering Title Insurance

by James L. Goldsmith
November 2019

The last major change to the Standard Agreement of Sale for Real Estate (ASR) added the requirement that the buyer order a title report within so many days of execution of the agreement. The reaction to this change was all over the place, but most folks were calm. So the question is, nearly a year later, how is this working?

I am advised that in many transactions reports are not timely ordered. I am not aware of any law suits where this failure is the subject of the suit and I expect that transactions resolve much as they had before this was a requirement.

The point to be made is that, unless stricken, timely ordering of a title report is a requirement that if breached can have consequences, not only for the buyer, but also for you. The potential problem, small as it may be, can be eliminated with little hassle. Determine who is going to conduct closing and order title right away. There is no requirement in the agreement that the title report be in hand by a certain date, but it is something you are doing to assist the buyer, so do it up front. Ask the title company to deliver the report as soon as reasonably possible.

I understand the common excuse. Why should the buyer pay for title when the home inspection may result in termination anyway? How about reversing the question: why should I pay for an inspection report if there is going to be a title problem?

The title report will likely cost between $150-$200. That is less than the home inspection report. While title is usually good, there is no guarantee and it’s not simply a question of title being good or bad. In many cases there are private restrictions that will be identified by the title report. Wouldn’t it be nice for the buyer to know whether there are any use restrictions on their property like the ability to fence in their yard, keep dogs or chickens, erect a shed, etc.? And if there are problems with title, they can usually be cured. But it takes time. Obtaining the title report late in the game is not the way to go.

Mr. Goldsmith is an attorney with Mette, Evans & Woodside and serves as outside legal counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends Realtors® in disciplinary hearings conducted by the Real Estate Commission. Jim was one of the voices of the PAR Legal Hotline for the first 27 years following its inception in 1992.

Share this page: