FREQUENTLY ASKED QUESTIONS
What is title insurance?
Title Insurance is a form of indemnity insurance, which insures an owner or lender against financial loss from title defects, liens, encumbrances or other problems with the title of real property. It also covers losses and damages suffered if the title is unmarketable (or unsellable) or if there is no right of access to the land. The amount of coverage of your policy is usually the sale price of the property. Although most insurance policies are a contract where the insurer indemnifies or reimburses another party against possible specific types of loss at a future date (such as an accident or death), title insurance generally insures against losses caused by title problems that have occurred in past events. Title insurance is issued by a title insurance company.
What is a title insurance company?
A title insurance company is licensed under the state to issue title insurance. A representative from the title company usually acts as the closing agent for a transaction.
What is a closing agent?
A closing agent is a neutral person or business that coordinates a transaction for the sale or re-finance of a property. It is the job of the closing agent to prepare the settlement statement, ensure that all documents and records are properly executed, that appropriate original documents are recorded in the county where the property is located, and makes sure that the proceeds are properly disbursed pursuant to the contract and applicable law. Closing agents will work with a lender if the property is being financed to arrange for all documents needed for the closing.
Why do I need title insurance?
Most individuals’ biggest asset is their home and that asset needs to be protected. Title insurance will protect an owner of property if there is a problem with the title after the closing date. The underwriter or insurance company will defend against a lawsuit attacking the title of the property or reimburse the owner for the actual monetary loss caused by the defect, up to the dollar amount of insurance provided by the policy. Before closing and before a title policy is issued, a title insurance company will search the public records to develop and document the chain of title and to detect known claims against, or defects in, the title to the subject property. If there are known defects, the title company will require that the defects be cured prior to the closing. Title insurance will provide you with the peace of mind that your largest investment will be safe.
Who is responsible to pay for the title insurance premium?
That depends. The contract for the sale and purchase of the real property should state who is responsible for the premium.
How much is title insurance?
Florida title insurance rates are set by Florida statute based on the purchase price. There are also some credits given to the buyer of title insurance in certain circumstances. Please contact our office for a quote.
How should I hold title?
That depends. There are many ways to hold title in Florida: tenants in common, tenants by the entirety, life estates, joint tenants with a right of survivorship, in trust, or hold title in an entity like a corporation, partnership or a limited liability partnership. Consult with one of our real estate attorneys for more information and to learn what options works best for you.
What is a HUD or settlement statement?
The HUD-1 or Settlement Statement is a standard form in use in the United States, which itemizes services and fees charged to the buyer and seller in a transaction by the lender, brokers, closing agent and other third parties. The HUD-1 form is regulated by the Department of Housing and Urban Development.
What kind of problems will a title search reveal?
Some examples of title defects are:
- Construction liens
- The property's address being misspelled in a deed conveying title
- A mortgage lien whose repayment hasn't been recorded
- A deed which has been signed but hasn't been properly recorded
- An easement that has not been properly recorded
- Unpaid property taxes
- A failure to transfer property rights to a former owner of the property
- A pending lawsuit before a court of law over ownership to the property
When do I need a survey?
For most closings, a survey is required to obtain title insurance. One common exception is for the purchase of an individual condominium unit. Mortgage lenders require a property survey before they will approve a loan. Even if a survey has been done in the past, lenders typically require a recent survey, generally done within six months of the closing date. An up-to-date property survey will reflect any recent changes to the property, such as the addition of a fence or driveway.
What is a survey?
A property survey is a sketch or map of a property showing its boundaries and other physical features. A survey reports will also show the relative location of a house, shed, other building and fences on the property, and it usually includes the position of any public or private easements. The survey will also show if there is any part of the property that is encroaching on a neighboring property or if the neighboring property is encroaching on the property that is being purchased. The report gives everyone involved in a land transfer a clear picture of exactly what is being purchased. In the U.S., property surveys must be done by a professional surveyor who is licensed in the state where the property is located.
What is a closing?
A closing of a real estate transaction is the point in time when the sale is ready to be completed. The closing is usually held at the closing agent’s office, At the Closing, the final documents pertaining to the sale/purchase of a piece of property are reviewed by the buyer, seller and other interested parties, the documents are signed as required and funds disbursed.
Who is present at closing?
Many people may be present at a closing such as: the buyer, the buyer's sales associate, the seller (or builder), the seller's sales associate, the lender or lender's representative, and the closing agent. Although it is not uncommon to have both parties close in a joint meeting, with today's busy schedules, many closings occur separately.
If I cannot be present on the scheduled day of closing, what happens then?
If you cannot be present on the scheduled day of closing, please let our office know so that we can accommodate your schedule. We can try to schedule an appointment to have the documents signed before closing so that the transaction does not get delayed. If you are out of town at the time of closing, or are not able to travel to the closing, we can assist you by coordinating a mail-away closing so that the documents to be signed and delivered by mail.
How long does it take to close?
That Depends. There are many factors that come in to play when trying to close a sale. Our office can close a file fairly quickly if the title is clear and the buyer is purchasing the property cash, however, every file is unique.
What is an estoppel letter?
An estoppel letter is required when the property being sold is part of a condominium association or a homeowner’s association. It details the monthly maintenance and assessments amounts, whether there are any violations, and whether the seller’s account is paid up to date or in arrears.
What types of payments are accepted?
To ensure that funds are good and that the funds are ready and available, Law Office of Melinda Grimaldi, PL only accepts wires.
What are closing costs?
Closing costs are the costs related to the purchase, sale or re-finance of a property. Closing costs vary depending on type of transactions. Common closing costs are as follows:
- Broker/real estate agent related
- Broker processing fees
- Lender related
- Survey cost
- Appraisal cost
- Credit report fee
- Flood certification fee
- Origination charge
- Homeowner’s insurance
- Flood insurance
- Reserve payments for taxes and insurance
- Mortgage insurance
- Lender title insurance premium
- Lender title insurance endorsements
- Title related
- Title insurance premium
- Settlement charges
- Estoppel fee
- Tax and lien search
- Title search
- Legal fees
- Recording fees
- Documentary stamps/transfer tax
Who pays for closing costs?
That depends. Lender related fees, if applicable, are paid by the buyer/borrower. The contract usually details who pays for which costs.
What do I need to bring to closing?
You will always need to bring valid identification with you to closing. The most common types of identification accepted are driver’s license or passport. For other items that may be needed at closing, please ask the attorney that is handling to your file.
If am purchasing a property with a mortgage, how does this affect the sale?
When purchasing a property with a loan, the process usually takes a bit longer. The lender will provide us with a closing package which will have specific instructions on what needs to be done before closing.
Do I need an inspection?
An inspection of your property is not required, but strongly suggested. The inspection allows a buyer to know the condition of the property before purchasing. Many times, the contract requires the seller to fix problems that arise in the inspection report. The buyer usually has the right to cancel during the inspection period of the contract.
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After reading the answers to these frequently asked real estate questions, you may still feel unclear or perhaps you found yourself with new real estate-related questions - contact Grimaldi Law Firm today.