"Who Pays for the Owner's Title Policy in Wisconsin? The Seller Does, and the Offer Form Says Which Costs Stay Yours"

Your Loan Estimate for a home in Sun Prairie arrives a few days after you apply for the loan. On page two there is a line for an owner's title policy, a four-figure number next to it, and the word optional. Your agent told you last week that the seller buys that policy in Wisconsin. Both of those things are true at the same time, and the form your offer was written on is the reason.

In Wisconsin, the standard WB-11 Residential Offer to Purchase has the seller provide and pay for your owner's title policy, in the amount of the purchase price. The title costs that stay yours are the lender's title policy your mortgage requires, the closing agent's fee, and the $30 the county charges to record each document, the deed and the mortgage.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including Wisconsin.

In most of the states I lend in, who pays for the owner's policy is a matter of local custom and whatever the contract ends up saying. I wrote about that in who pays for owner's title insurance, state by state, and for most states there is no rule to point to. In Wisconsin, who pays for which policy is printed in the offer form every Wisconsin licensee writes from, so you can read the answer in your own contract.

Who pays for the owner's title policy in Wisconsin?

The seller, under the form itself. Wisconsin real estate licensees write residential offers on a form approved by the state's Real Estate Examining Board, the WB-11 Residential Offer to Purchase. Its title evidence clause says the seller "shall give evidence of title in the form of an owner's policy of title insurance in the amount of the purchase price" and "shall pay all costs of providing title evidence to Buyer." The same clause says the buyer "shall pay the costs of providing the title evidence required by Buyer's lender and recording the deed."

Two policies are in play. An owner's policy protects your ownership of the home. If an old lien turns up later, or a signature three owners back turns out to be forged, the owner's policy is what pays. A lender's policy protects only the lender's claim on the home as security for your loan, and every lender requires one on a financed purchase. In Wisconsin the form puts the first of those on the seller and the second on you.

The Wisconsin REALTORS Association's own explanation of the offer form walks a client through the same clause, and it is written for the person signing. I'd read it once before your offer goes in.

The clause is a default, and the parties can change it

The WB-11 is a contract, so the title evidence paragraph is a term the two sides agreed to rather than a law. A seller can strike it or shift it in a counteroffer, and an unusual offer sometimes does. If your accepted offer has the standard language, the owner's policy is the seller's. If the seller crossed it out, you'll want to decide whether you are buying the owner's policy yourself, because nobody else will. The Wisconsin mortgage page covers the clause and its limits alongside the rest of what makes a Wisconsin closing its own thing.

One practical point follows from the seller paying. The seller is usually the party ordering title, since the seller is the one paying for the owner's policy. Federal law still keeps that choice from being forced on you. The Wisconsin REALTORS Association's legal hotline explains that RESPA section 9 bars a seller from requiring, as a condition of the sale, that you buy owner's title insurance from a particular company. The hotline's practical advice is plain: if you want a specific title company, name it in the offer.

The title and recording costs that stay yours

These are the title and recording costs on your side of a standard Wisconsin purchase.

The lender's title policy. Your mortgage requires it, and on a purchase it is issued at the same time as the owner's policy. Wisconsin title agencies price that simultaneous issue as a flat charge rather than a full second premium on the loan amount. Anything unusual, such as a loan larger than the price, gets quoted by the agency, and your lender may ask for an endorsement, which is a short add-on to the lender's policy that covers a specific risk. Each one has its own price once the lender names it.

The closing agent's fee. In Wisconsin the fee for conducting the closing is published county by county, all seventy-two of them, and in a number of counties the purchase figure and the refinance figure differ. That is why the Wisconsin pre-approval page asks you for the county before it shows that line.

Recording the deed and the mortgage. Wisconsin's register of deeds statute, § 59.43(2)(ag) sets the fee at $30 for recording any instrument, and the counties apply it per document no matter how many pages the document runs. A purchase records two documents, the deed and your mortgage, so recording is $60 on your side of the sheet.

Some closing agents also charge a small transaction fee to each side, so please ask whether one applies to your file. Those are all the title costs on your side. The owner's policy, which is usually the largest title premium on a purchase, is on the seller's side.

Does Wisconsin charge a tax on the mortgage?

No. Wisconsin has a real estate transfer fee, and § 77.22(1) says it is "imposed on the grantor," which is the seller. On top of that, § 77.25(10) exempts a transfer made "solely in order to provide or release security for a debt or obligation." A mortgage is exactly that kind of document. So no Wisconsin mortgage pays a tax measured by the loan amount, on a purchase or a refinance. The mortgage registry or intangible tax you may have paid in another state is not on a Wisconsin sheet.

Reading the title lines on your Loan Estimate

The Loan Estimate is a federal form, and it is filled out under a federal rule that does not know what your Wisconsin contract says. The disclosure rule, Regulation Z § 1026.37, has the lender show the lender's policy at its full stand-alone premium and list the owner's policy as optional, using a formula that accounts for the simultaneous issue. If the estimate is prepared before the lender knows the seller is paying for the owner's policy, that line can still appear on your side.

So the Loan Estimate can show title costs on your side that your contract has placed on the seller. The Closing Disclosure is where the two get reconciled. On a Wisconsin purchase written on the standard form, the owner's policy ends up on the seller's side of the Closing Disclosure, and the lender's policy on yours at the simultaneous charge. If you are comparing two lenders, how to compare two Loan Estimates explains which lines are the lender's own price and which are that lender's guess at somebody else's bill. The title lines are in the second group.

The figure to watch is the estimate's Calculating Cash to Close table, because that is what you bring to the closing. If the owner's policy is in it on an early estimate, it comes out once the seller-paid items are reflected, and your loan officer can show you the corrected figure.

The title commitment, and why you'll want to read it

Before closing, the title company issues a commitment, which is its promise to issue the policies once certain things are done. It lists who owns the parcel, what is recorded against it, and what the policy will not cover. Because the seller orders the owner's policy in Wisconsin, the commitment may reach your agent and your lender before it reaches you, so please ask for a copy. A title issue before closing explains how Schedule B splits the items into the ones somebody has to clear and the ones that stay.

The steps, in order

1. You'll want to be pre-approved before you write an offer. The qualifying review is the same in Wisconsin as anywhere, and what a documented pre-approval involves covers it.
2. Please read the title evidence paragraph of your WB-11 before you sign it. If the standard language is there, the owner's policy is the seller's. If it has been changed, you'll know what you are agreeing to carry.
3. If you have a title company you prefer, you can name it in the offer. The seller is paying for the owner's policy and usually orders it.
4. Please tell your loan officer which county the home is in. The closing agent's fee is published per county, so the estimate needs the county to be complete.
5. You can read your Loan Estimate knowing the federal form can show the owner's policy even when the seller is paying for it. The Closing Disclosure is where the seller-paid lines land on the seller's side.
6. Please ask for the title commitment when it is issued, and read Schedule B. If something on it has to be cleared, finding it early leaves time to clear it before closing.

Mistakes to avoid with Wisconsin title costs

Treating the Loan Estimate's owner's policy line as your bill. On a standard WB-11 purchase it is the seller's line, and the federal form can show it anyway. You'll want to budget from an estimate that already reflects the seller-paid items.

Assuming the clause is a law. It is a contract term. A counteroffer can shift it, so please read the title paragraph of the version you actually signed.

Leaving the title company blank in the offer. Once the seller has placed the order, moving it is a negotiation.

Letting the owner's policy drop out of the file. If the seller strikes the clause, the owner's policy becomes your decision, and it is the only one of the two policies that protects you. A seller credit toward closing costs can absorb it, and whether the seller can pay your closing costs covers the caps.

An example, with invented numbers

Numbers below are made up to show the mechanism. The $30 recording fee is the statutory figure; every other dollar amount here is invented.

Say you are buying at $350,000 in Dane County with a $280,000 loan, and your offer was accepted on the standard WB-11 with no change to the title paragraph.

SELLER'S SIDE
Owner's policy, $350,000 of coverage          seller pays
Real estate transfer fee                       seller pays

YOUR SIDE
Lender's policy, simultaneous issue           $    500
Closing agent's fee, Dane County              $    450
Endorsements the lender named                 $      0
Recording: deed $30 + mortgage $30            $     60
                                              ---------
Your title and recording group                $  1,010

Your early Loan Estimate may have shown the owner's policy on your side with a four-figure premium next to it, and the lender's policy at a full stand-alone rate well above $500. Both numbers are the federal form doing what the rule tells it to do. By the Closing Disclosure, the owner's policy is on the seller's side, the lender's policy is at the simultaneous charge, and your cash to close is built from the right column.

Now take the same purchase and suppose the seller's counteroffer struck the owner's policy from the seller's obligations. Nothing about the loan changes. The owner's policy becomes a line you decide on: carry it yourself, negotiate a seller credit toward it, or go without the one policy that protects your own equity. That is the conversation to have before you sign the counteroffer.

Where to start

When you are ready, you can see rates for your own scenario with a Wisconsin tax and insurance estimate inside the payment. There is no credit pull, no account, and nobody calls you afterwards. You will see several options on one sheet, and you can choose the option that works best for you.

Nothing here is a loan approval, a denial, a commitment to lend, or legal advice. The WB-11 belongs to Wisconsin's Real Estate Examining Board and the recording and transfer fee statutes belong to the Wisconsin Legislature. How any of it applies to your own purchase is a question for your agent and your own attorney. No letter from anyone is a loan commitment; final approval depends on the property, the appraisal and full underwriting.

Common questions

Who pays for title insurance in Wisconsin?

The seller pays for the owner's policy and you pay for the lender's policy, under the WB-11 Residential Offer to Purchase. The form has the seller give evidence of title in the form of an owner's policy of title insurance in the amount of the purchase price and pay all costs of providing that title evidence. You pay for the title evidence your lender requires and for recording the deed. It is a contract term, so a counteroffer can change it, but it is the language every Wisconsin licensee starts from.

Does the seller pay for the lender's title policy in Wisconsin?

No. The WB-11 puts the title evidence your lender requires on you, and the lender's policy is that evidence. On a purchase it is issued at the same time as the seller's owner's policy, and Wisconsin title agencies charge a flat simultaneous-issue amount for it rather than a full premium on the loan amount.

How much does it cost to record a deed and a mortgage in Wisconsin?

One flat fee per document. Wis. Stat. § 59.43(2)(ag) sets the register of deeds' fee for recording any instrument, and the counties apply it per document regardless of how many pages it has. A purchase records two documents, the deed and the mortgage, so you pay that fee twice. A refinance records only the new mortgage, so you pay it once.

Is there a mortgage tax in Wisconsin?

No. Wisconsin's real estate transfer fee is imposed on the grantor under § 77.22(1), which means the seller, and § 77.25(10) exempts a transfer made solely to provide or release security for a debt. A mortgage is that kind of document, so it carries no transfer fee and there is no separate mortgage registry or intangible tax. The mortgage pays only the flat recording fee.

Why does my Wisconsin Loan Estimate show an owner's title policy if the seller is paying for it?

Because the Loan Estimate is filled out under a federal rule that does not read your contract. Regulation Z § 1026.37 has the lender disclose the lender's policy at its full stand-alone premium and list the owner's policy as optional. An estimate prepared before the lender knows the seller is paying can still show it on your side. The Closing Disclosure is where the seller-paid owner's policy moves to the seller's side and the lender's policy appears at the simultaneous-issue charge. Your loan officer can show you a cash-to-close figure that already reflects the seller-paid lines.

Can I choose the title company in Wisconsin?

Yes. Federal law bars a seller from requiring, as a condition of the sale, that you buy owner's title insurance from a particular company. Because the WB-11 has the seller provide and pay for the owner's policy, the seller is usually the one ordering title. The Wisconsin REALTORS Association's legal hotline advises naming the title company you want in the offer itself, so the choice is settled before the order is placed.