ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS ABOUT CLOSINGS

Do I need an attorney?

The title company will prepare and record all documents necessary for the closing, and can explain the documents and procedures to you.  It is not necessary for either the Buyer or the Seller to enlist the services of an attorney, and in fact, the vast majority of transactions occur without one.

We cannot, however, give you advice or counsel you as to any legal matters. If you feel more comfortable with your attorney's advice, we will be happy to cooperate in any way possible.

Why is my payoff so much higher than I thought?

The amount of your payoff includes not only the principal balance of the loan, but will also include interest, any late fees, and miscellaneous charges.  Interest is paid in arrears; therefore, the amount of interest that will be added to your principal balance will include interest from the first of the month of your last payment through the date of closing.

For example, if the closing is on April 10 and your last payment made was for March, interest will be computed from March 1 through April 12 (add two days for processing).

Your lender will figure this for you if you call the number shown on your coupon book.  Remember that most lenders will not credit your escrow account balance to your payoff, but will refund it to you within 30 days of payoff.

Who should hold the earnest money?

It is better to let an independent third party, such as the title company, hold the earnest money in their escrow account.  Should a dispute arise between the Buyers and Sellers, it is always better to have the earnest money held by a neutral party.

What is the Seller required to pay for?

The sheets entitled "Net Proceeds" will help you to understand this.  Traditionally, the Seller pays for any commissions, the Owner's Policy of Title Insurance and related fees (search, exam and closing), documentary stamps on the deed ($7.00 per $1,000 based on the sales price), recording fees for satisfactions of mortgages, and real estate taxes from Jan. 1 through the date of closing.

All standard contract forms call for the Seller to pay these costs and for the Buyer to pay for all items relating to the mortgage.  Any other arrangements should be clearly defined in the sales contract.

If, however, your Buyer obtains V.A. or F.H.A. financing, as the Seller you will be required to pay for some items normally charged to the Buyer.  These will be different with each lender, and can run anywhere from one hundred to several thousand dollars.  You should obtain an estimate of these costs from your Buyer's lender prior to signing a sale agreement.

Who selects the Title Company?

Traditionally in our area the Seller pays for the Owner’s Title Insurance Policy, and therefore is entitled to select the Title Agent.  Most contract forms, however, now provide space to designate not only who will pay for the title insurance, but which party will select the title agent.  Although the Seller will make that decision in the majority of transactions, it is becoming more and more common for the Buyer to be the one making the selection.

Many Realtors and Real Estate Agencies own or have an interest in a title company, and therefore receive compensation for referring business to that title company.  Be sure to check your contract to determine who will be designating the title agent; otherwise, you could be obligated to close with their title company.

We believe the best solution is to have a mutually acceptable title company that is stipulated in the contract itself.  The best criteria for making that determination is the reputation and stability of the title agencies serving your area.  Mortgage brokers and non-affiliated Realtors can offer objective advice and be a good source of information about the available choices.

Should I obtain several quotes for the cost of the title insurance?

The minimum rates for title insurance are established by the State of Florida, and no title insurance company may charge less than the minimum.  In addition, the state mandates that title companies charge for the related services of performing the title search and examination and for conducting the closing.

In most cases you will find that there is not a great deal of difference in the costs between different title companies.  If you are uncomfortable with the costs, we recommend that you call several companies; however, we also caution you to make sure that the quotes you receive include the search and closing fees.  If there is a substantial difference, chances are there is something wrong.

We also would like to stress that the big difference between companies is not cost, but service.  Going with the cheapest bid can end up costing you time and money in the end, and can even mean the difference as to whether or not the closing actually takes place.

When should I order the title insurance?

Even if the closing is not scheduled for several months, the title insurance should be ordered within several days of the execution of the contract.  If a defect is uncovered in the title search, the title company will need as much time as possible to work out the problem.  The majority of title problems can be solved without disrupting the closing if there is adequate time.

What does the title company need?

When you place the order, you should give them the sales contract, the names, addresses, and phone numbers of all parties to the contract, your social security number(s), marital status, the name of your lender(s) and loan number(s), including any second mortgages or equity lines, and any special instructions.