Title, Title Insurance, Closing and Escrow Terms
Buyer’s Attorney Fee
This fee is paid to the attorney who prepares and reviews all of the closing documents on your behalf.
When someone asserts an interest in your property. For example, they might say that they are the true owner of the property you paid for or, at least, have some right to use it (such as passing through to get to another piece of land). These are just a couple examples of many possible scenarios that might adversely affect your ownership of the property. You should carefully review the terms of the Owner’s Title Insurance Policy to make sure you understand the different facts that might give rise to a claim.
Closing (also known as settlement)
The last step in buying your home. On the closing date, the ownership of the property being sold is transferred to you (the buyer). There are some nuances in different states. Ultimately, the title deed is delivered to the buyer, the title is transferred, the seller is paid the purchase price, closing costs and fees are paid, and title insurance policies are issued (although the policies often may be issued within a short time following the closing).
Yes, there are fees associated with buying a home. Closing costs typically run 3-5% of the purchase price of the home, not including your down payment. The specific fees related to the title company may include, but are not limited to: (a) attorney fees, (b) recording fees, (c) Owner’s Title Insurance Policy premium, and (d) Lender’s Title Insurance Policy premium. These fees may be incurred by either the buyer or seller- it depends on a few different factors.
As the buyer of the property, you should receive a Closing Disclosure document at least three business days before your closing. This document, provided by your lender, should look similar to the Loan Estimate that was provided to you by your lender three business days after applying for a mortgage. The Closing Disclosure provides you a breakdown of your loan terms and the respective closing costs associated with your loan.
Closing Fee or Escrow Fee
A fee paid to the title company, title/closing agent or escrow agent for conducting your closing.
Anything that is wrong with title to your property. It could be the result of a stolen identity, forged documents used in a previous sale, or plain old human error in a county recorder’s office, to name a few. A title with a defect is considered irregular or faulty such that it contains a blemish, imperfection or some sort of deficiency.
A claim against the property by someone other than the owner. Examples of encumbrances include, but are not limited to, mortgages, mechanics’ liens, easements or other recorded restrictions on the use of property.
An account set up by your lender or a company that is servicing your mortgage on behalf of the lender to hold funds needed to pay property-related expenses, such as homeowners insurance, property taxes, or any other applicable expenses.
A person (sometimes an attorney, sometimes the title agent, and in some states an agent of a company focused specifically on escrow) responsible for following all of the escrow instructions from the buyer and seller, as well as the handling of documents and payments associated with the loan. The escrow agent’s responsibilities include, but are not limited to, ensuring that all relevant payments are made to and from the escrow account and that necessary documents are received on time.
Insurance that protects against physical damage to your property. In many cases the first year’s premium is paid at closing.
Lender’s Attorney Fee
This fee is paid to the lender’s attorney for preparing and reviewing all of the loan and other closing documents on behalf of the lender.
Lender’s Title Insurance Policy
A form of title insurance that insures the lender that you own the home and that the lender’s mortgage is a valid lien on the property. The cost of a lender’s title policy is paid to the title company and is typically paid by the buyer/borrower.
An encumbrance on real property securing a monetary obligation. A lien is basically a way for a lender or other party that is owed money to take an interest in real property as collateral for repayment of the debt. Say, for example, that you borrowed money for a construction loan to renovate your home, and the lender required you to sign a mortgage on your home. The mortgage creates a lien on your home, and if you fail to pay the loan back, the lender can force you to sell the home to pay them back.
Natural Hazards Disclosure Report
A report that provides disclosure of specific natural hazards that may affect your property, such as earthquakes, floods or wildfires. May be required in some states.
A person who is licensed to attest to the fact that the persons named in documents that must be recorded did, in fact, sign them.
In Florida, the cost of premium for Owner’s Title Insurance Policy is $5.75 per thousand dollars for the first $100,000 of liability, plus $5.00 per thousand dollars for liability from $100,000 to $1 million (plus additional amounts as set for by the state of Florida for liability amounts greater than $1 million). This typically averages to approximately 0.5% of the home’s purchase price for the Owner’s Title Insurance Policy, although that may vary. This cost is in addition to any fees that the buyer may owe to the title company for closing services and title searches. SimplyTitle rebates a portion of this to you in Florida by utilizing what is known as the Butler Rebate.
This tax rate is dependent on the county where your real property is located. Property taxes due for the current year are typically prorated between the buyer and seller at the closing, with the seller paying taxes due before closing and the buyer paying taxes due after closing.
These fees are paid to the local government official responsible for maintaining public records for recording various closing and loan documents. These fees may be paid by you or by the seller, depending upon your agreement of sale with the seller. The buyer usually pays the fees for recording the new title deed and mortgage.
Your right to own, possess, use, control, enjoy and dispose of real property. The term may also refer to the legal document that demonstrates your ownership of real property, which is also often referred to as a title deed.
Typically a licensed person (sometimes an attorney) who is responsible for overseeing the closing process, which includes, but is not limited to: (a) the title search and examination, (b) facilitation of the closing process, (c) filing and recording the required legal documents, and (d) issuance of title insurance.
Acts as an agent for the title insurance underwriter and, to a limited extent, a buyer or seller. The title company (a) reviews the title to ensure that is clear and does not have any liens or encumbrances, (b) facilitates the closing, (c) files and records the required legal documents, and (d) issues the title insurance policies. The title company is key to coordinating the interests of all parties to the transaction, including the buyer, the seller, the mortgage lender and the real estate agent, and acts as an impartial intermediary for all of those parties.
Title Insurance Underwriter
Lender and Mortgage Specific Terms
Fixed Rate vs. Adjustable Mortgages
Loan Estimate Form
Loan-to-value ratio (LTV Ratio)
Private Mortgage Insurance (PMI)
General Home Buying for Resale Homes
Buyer’s Agent vs. Listing Agent
Earnest Money Deposit
Offers and Contracts
Real estate commission