When you buy an investment property, title insurance costs and who pays them can materially affect your cash to close and potentially your overall return. Arizona and California follow different customs and understanding them helps investors plan accurately and make more money.
Did you know that California investors have a financial advantage when they sell in the Golden State, and buy in the Copper State?
Here’s a breakdown of title insurance customs, Arizona vs. California. These are customary practices, not laws, but they are what most escrow officers, Realtors, and lenders expect in each state.
What You Get from Title Insurance
Big Picture Difference
Arizona and California flip who usually pays for the owner’s policy. That one difference drives many contract negotiations and closing cost expectations.
In Arizona, the Seller pays for the Owner’s Title Insurance Policy and the Buyer pays for the Lender’s Title Insurance Policy.
In California, the Buyer pays for both.
Why Arizona works this way
The seller is viewed as responsible for delivering clear title. Paying for the owner’s policy is seen as the seller’s proof that title is marketable, and this is a long-standing escrow and title company tradition.
Why California works this way
The custom developed around the idea that the buyer controlled their own protection. The buyer chooses who and how to insure their ownership, so title insurance is treated as a buyer closing cost. To buyers, paying for this insurance is just part of buying a house.
Other notes about Arizona
Title and escrow are often handled by the same company.
Owner’s policy cost is rarely negotiated, although it absolutely can be if the buyer wants to control who issues the policy.
This is the default custom in most Arizona counties (Maricopa, Pima, etc.).
Refinance transactions: borrower usually pays the lender’s policy again (new loan)
Other notes about California
Escrow is separate from title in many transactions
County customs can vary slightly, but buyer-paying is dominant statewide
Sellers are likely to push back if asked to pay owner’s policy
Important Legal Reality (Both States)
These are customs, not laws. Contracts can and do override custom. Everything is negotiable if agreed to in writing.
Title Insurance Customs
Common Investor Insight (especially AZ vs CA)
Many California investors buying in Arizona are pleasantly surprised when they see lower title insurance costs and lower overall closing costs, sometimes adding up to thousands of dollars in lower cash to close. This money can be used to stretch a budget or even expand a portfolio if you do everything right. Planning is key, so if you need any professional help, check out our preferred partners page at Preferred Partners – Owners with Options
On a $1,000,000 fourplex, this can mean an almost $4000 advantage in closing costs by moving an investment to Arizona as opposed to just buying another one in California. For investors buying multiple properties, this difference compounds quickly.
Lower acquisition costs mean better cash-on-cash return, less capital tied up at closing, easier scaling into multiple properties, stronger numbers for BRRRR and value-add strategies. That’s a real, tangible advantage.
Bottom Line for Investors
Arizona: Seller-paid owner’s title = lower entry costs
California: Buyer-paid title = higher cash requirements
Over multiple deals, the difference can equal tens of thousands of dollars.
If you are a landlord in California trying to find a better way to be a landlord, please contact us! We have developed a specialty in helping people just like you improve cash flow and peace of mind with he same real estate investment you already have. And of course, if you are looking to expand your portfolio, give us a call or contact us here. If you want to save even more, we will pay for the first year’s warranty on the first property you buy in Arizona as an investor. On a fourplex, this too can save you thousands of dollars!
Please contact Vince Davis or Evelyn Szymanski, the Agents with Options ™ at 480 720 4040 or at info@agentswithoptions.com. We also have a YouTube channel with more information on this and many other topics, so please check it out at youtube.com/@theagentswithoptionsrealestate
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