FREQUENTLY ASKED QUESTIONS
What is a title company? What do they do?
What is title insurance
When buying and selling a piece of real estate, title insurance insures both the lender and the homebuyer against loss or damage in the event there are defects or encumbrances in the property title. Each title insurance policy is subject to specific terms, conditions and exclusions.
The two standard forms of title insurance policies are:
- The Owner Policy insures the homeowner against certain risks or hidden threats potentially associated with the title;
- The Lender or Loan Policy insures the lender that the mortgage is a valid lien or security on the property.
How much is title insurance?
Florida title insurance rates are set by the Florida Department of Insurance and are uniform throughout the State. These published rates can be found in Section 627.7825, Florida Statutes.
Do I need title insurance?
Yes! Buying a title insurance policy is a customary step all homebuyers should take prior to closing. It is possible for defects to the title or liens on the property to remain unexposed at the time of closing. An Owner’s Policy of Title Insurance will protect you from these and other threats to your ownership and title of real property. Title insurance coverage lasts for as long as you own your home.
What is title search?
A title is proof that the property owner is indeed in lawful possession of that property. A title search involves retrieving documents that demonstrate all events over the life of the property.
When real estate is sold, a title company often is asked to search the property’s title history for defects which can adversely affect the property’s value. From the search, the title company prepares a report called a title abstract, or an even more extensive title history. Mortgage lenders generally require a title search before they will loan money.
What is an escrow account?
In real estate dealings, an escrow account is a depository consisting of everything pertaining to the buy-sell transaction, including money, the deed and various other documents. These documents and funds are kept and processed under the secure supervision of a neutral third party, called an escrow holder or agent.
What does the escrow agent do?
The escrow holder, or agent, plays an important role in your real estate undertaking. He or she is the impartial “third person” responsible for facilitating the complicated transaction to make sure it is done accurately and fairly. The agent holds legal documents and funds on behalf of a buyer and seller and distributes them according to the buyer’s and seller’s instructions.
When a buyer and seller reach agreement on the terms of sale, all parties involved give their portion of the transaction—money, deeds, policies, legal documents—to the escrow agent. The escrow agent ensures everyone does what they agreed to do before handing over the deed and distributing the funds appropriately.
By the time the property changes hands, or the refinance is complete, all the variables are coordinated and everyone has peace of mind that it was all done correctly.
What happens during a closing?
Closings generally take place at a title and escrow company. In attendance are the seller, homebuyer, real estate agents and lawyers for the buyer and seller.
Also in attendance are the closing agent, the title insurance rep, and the escrow agent. Sanders Title Company typically fulfills these three roles, coordinating and documenting the transfer of documents and money, disbursing funds, and taking care of numerous closing details.
The following residential closing actions transfer the ownership of property from seller to buyer:
- All legal documents are signed. These generally include the closing statement, Truth in Lending statement, mortgage note, deed of trust, affidavits from buyer or seller, and any contract riders.
- The buyer (or the lending agent for the buyer) gives the seller a check for the amount owed toward the purchase price of the home or property.
- The seller signs the deed over to the buyer. The seller also transfers the keys to the homebuyer.
- The title company registers the new deed listing the buyer as the new homeowner.
- After closing costs are paid and the remaining balance on the mortgage is satisfied, the seller receives all proceeds earned on the sale.