What Is an Owner’s Title Policy and Why Do Sellers Pay It in Arizona?

When you sell a home in Arizona, one of the line items you’ll see on your settlement statement is the Owner’s Title Policy. Many sellers are surprised by this charge, so let’s break down what it is and why it matters.

What Is an Owner’s Title Policy?

An Owner’s Title Policy is a type of insurance that protects the buyer. It guarantees that the buyer will receive clear ownership of the property—free from past claims, liens, or legal disputes. If someone were to come forward later with a claim on the property, the policy would cover the buyer’s legal defense and financial losses up to the amount of the purchase price.

Why Do Sellers Pay for It in Arizona?

In Arizona, it’s customary for the seller to provide this policy at closing. Here’s why:

It gives the buyer confidence that they are receiving clear title.

It’s a show of good faith and helps ensure a smooth transaction.

It’s considered a standard seller expense in our market, much like HOA transfer fees or property tax prorations.

While every contract is negotiable, buyers typically expect the seller to cover this cost. In fact, many Arizona buyers would consider it unusual if the policy wasn’t provided.

How Much Does It Cost?

The cost of the Owner’s Title Policy depends on the sales price of the home. For example, on a $315,000 property, the premium is about $1,495 (this was the charge on one of our recent transactions).

Bottom Line

The Owner’s Title Policy is not just another fee—it’s an important piece of protection for the buyer that helps keep Arizona real estate transactions moving smoothly. As the seller, paying for it ensures your buyer has peace of mind and clears the way for a successful closing.

Got Questions, give me a call your local expert, Sarah Luzi 480-227-3693