New Lisbon, WI asked in Real Estate Law for Wisconsin

Q: Can a WI Realtor force a seller to purchase title ins for new owner? Why can’t new owner purchase their own title ins?

Are the Realtor and/or WI Title Comp supposed to inform seller with details of all closing costs? In my case, my specific closing cost questions weren’t answered.

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2 Lawyer Answers

Jason Anthony Greller

Answered
  • Madison, WI
  • Licensed in Wisconsin

A: Your obligation to provide title insurance to the Buyer comes from a standard provision in the Offer to Purchase requiring Seller to provide evidence of title to the Buyer in the form of a title insurance policy. If you were working with a listing agent I agree that it seems reasonable to expect the agent to provide you with a settlement/closing cost estimate when you are reviewing offers. If the agent was working only for the Buyer, then the agent still has a duty to fairly provide services to you but I would not agree that the Buyer's agent has a duty to detail closing costs.

In regard to the title company - generally, most title companies will provide estimates of seller closing costs upon inquiry. I'm not sure why your specific questions were not answered.

Thomas B. Burton agrees with this answer

Thomas B. Burton

Answered
  • Eau Claire, WI
  • Licensed in Wisconsin

A: The standard Wisconsin Offer to Purchase imposes the costs of title insurance on the Seller. So I can tell you this is standard practice in Wisconsin. Realtors are not lawyers, so they are not allowed to draft legal contracts. Instead, they have obtained an exception from the Legislature allowing them to use these standard forms without running afoul of the unauthorized practice of law rules. What this means is that if your realtor uses the Standard Offer to Purchase form the costs of title insurance will be imposed on the Seller, unless you as the Seller specifically negotiate to impose this cost on the Buyer instead. These provisions in the Standard Offer to Purchase can be negotiated, but they are often not negotiated since many Sellers just accept paying for the costs and because it is the prevailing practice in a majority of real estate transactions in Wisconsin. I am sorry this was not explained clearly to you by the Realtor. If the Realtor was hired by you it seems reasonable that they should have gone through this part of the contract with you and answered your questions. If the Realtor was representing the Buyer, then they did not have a duty to look after your interests. For this reason I recommend that you discuss any legal contract with your own attorney before entering into it. Best of luck.

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