What is a Real Estate Closing?
Closing, which is sometimes also referred to as “Settlement” or “Escrow”, is the event where the Title to a piece of property is transferred from a Seller to a Buyer. Closing involves the completion of all the necessary paperwork to finalize the agreement between the Seller and the Buyer. All financial issues are settled at Closing and are known as "closing costs." All necessary financial and transfer documents are signed by the Seller and the Buyer and then filed with the appropriate local authorities, which successfully transfers the title.
What is a Title?
Title is the right to occupy and use a property. When you purchase a property, you are purchasing the Title to that property. Title may be contested by a person or entity that is not a party to the real estate transaction and based upon past rights and claims, which is why paying for a detailed Title Search and examination is recommended prior to purchasing a property.
What is a Title Search?
A Title Search is a detailed examination of the historical records concerning a property, which may include deeds, court records, property and name indexes, and many other documents. The purpose of a Title Search is to verify the Seller’s right to transfer ownership of the property, and to discover any claims against the property, defects, and/or other rights or burdens on the property.
How does Title Insurance work?
If a claim is made against your property, Title Insurance will, in accordance with the terms of your policy, assure you of a legal defense and pay all court costs and related fees. Also, if the claim proves valid, you will be reimbursed for your actual loss up to the face amount of the Title Insurance Policy.
How much does Title Insurance cost?
The cost of Title Insurance will vary based on the purchase price of the property. A title insurance premium is paid one time only at Closing.
In Florida, the Title Insurance premium is based on promulgated rates and calculated based on the purchase price as follows: up to $100,000 = $5.75 per thousand; over $100,000 = $5.00 per thousand (ex: $100,000 = 575.00; $200,000 = $1,075.00).
Who pays for Title Insurance?
The party who pays for Title Insurance varies based on the county where the property is located and can be negotiated in the sales contract. In Florida, the Seller generally pays for the Title Insurance and also chooses the title/closing company. In Miami-Dade and Broward Counties, the Buyer pays for Title Insurance and selects the title/closing company. In Palm Beach County, the Sellers pays for Title Insurance and selects the title/closing company.
What are the general Closing Cost responsibilities?*
- Title Search
- Closing/Settlement Fee
- Owner’s Title Insurance policy
- Real Estate Sales Commission
- Home Warranty (if offered by Seller)
- Homeowner’s Association Estoppel Fee
- Homeowner’s Association Dues prorated to date of closing
- Taxes - prorated to date of closing
- Doc stamps on Deed
- Lender fees, if applicable and specific charges exist
- Condo/HOA Approval Fee
- Recording Fees (Deed, Condo/HOA Approval)
- Prorate Condo/HOA Charges
- Homeowners Insurance
- Flood Insurance (if applicable)
- Inspection Costs
- Real Property Tax Proration
- Title Services (including loan closing services and Lender's title insurance)
- Simultaneous Issue Mortgage Title Insurance
- Title Endorsements (including Florida Form 9)
- Loan Discounts or Points
- Doc Stamps on Mortgage
- Intangible Tax on Mortgage
- Escrow (taxes, insurance, condo/HOA fees, mortgage insurance)
- Lender's Attorneys' Fees
- Document Preparation
- Appraisal Costs
- Tax Service Fee
- Termite Report
- Credit Report
- Environmental Report
- Flood Certification Fee
*Examples only. Your specific Sales Contract will govern. In Miami-Dade and Broward Counties, title premium is generally a Buyer's expense; and in Palm Beach County, title premium is generally a Seller's expense.