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WHAT IS TITLE INSURANCE?
Title insurance is protection against loss arising from problems connected to the title to your property.Before you purchased your home, it may have gone through several ownership changes, and the land on which it stands went through many more. There may be a weak link at any point in that chain that could emerge to cause trouble. For example, someone along the way may have forged a signature in transferring title. Or there may be unpaid real estate taxes or other liens. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.Title insurance differs from other forms of insurance. A title policy insures against matters of the past, and the premium is paid only once–at closing. The policy remains in effect for as long as the insured or the insured’s heirs have an interest in the property.
WHAT DOES SOUTHERN TITLE DO?
The title policy, although the tangible product of the title company, is only a small aspect of the total role the title company plays in a real estate transaction. Before the closing itself can take place, Southern Title will conduct a thorough search of the property records, collect information sources including the REALTORS®, lender, termite company, surveyor, hazard insurance company, etc.
HOW MUCH DOES TITLE INSURANCE COST?
The cost of title insurance is determined by the State of Florida’s Office of Insurance Regulation (OIR), and it is promulgated rate paid as a one-time fee at closing, with coverage that last as long as there is a balance on the mortgage loan (if it’s a loan policy), or the owner or his or her heirs have an interest in the property (if there’s an Owner’s Policy).
In Florida, the title premium is tied to the purchase price. An owner’s title policy costs $5.75 per $1,000 of the purchase price up to $100,000. Over that mark, the rate is $5.00 per $1000, with additional rate adjustments as the liability amount increases.For example, for a $150,000 home, the state promulgated rate would be $825.00 ($100,00 x $5.75 =) $575 + ($50,000 x $5.00 =) $250 = $825.00. The search and closing fee, required by Florida law, vary depending on the company used. You have a choice when it comes to title insurance, so please ask for Southern Title. We’d be happy to provide you with a quote.
DO I REALLY NEED TITLE INSURANCE?
Every day in America, someone somewhere is buying or selling a home. And behind the scenes of each transaction is the title insurance industry. At Southern Title, our detailed-minded professionals conduct in-depth searches to uncover and remedy any problems with the title of ownership.
It could be a boundary dispute, a tax lien, a mechanic’s lien, utility assessments, home improvement code violations . . . the list goes on and on. At Southern Title, we look for these possible problems, and them make every effort to resolve them so you can move into your new home with assured peace of mind.
Plus if a title problem should arise in the future – even decades later – your Owner’s Policy of Title Insurance can protect you, even to the point of paying for legal representation.
For Southern Title, it is all about protecting your piece of the American Dream . . .and protecting your peace of mind.
WHAT KINDS OF TITLE PROBLEMS ACTUALLY OCCUR?
“I thought the mortgage was paid off.” Despite our information age, the fact is some “paid off” mortgages never get registered as having been paid off. So when a homeowner goes to sell the property, the title search may turn up a previous mortgage that the seller never knew existed. On paper, it looks like the property has two mortgages that need to be paid off, and that can hold up the sale.
There are many reasons this could happen, but most common is a slow, incorrect or nonexistent filing by the previous mortgage holder. In this case, Southern Title has to determine if the prior mortgage truly was paid off, or if it wasn’t satisfied, how to pay it. Either way, the issue needs to be resolved before the house can be sold.
WHAT IS THE DIFFERENCE BETWEEN A LENDER’S TITLE POLICY AND AN OWNER’S TITLE POLICY?
When you obtain a loan to buy your home, your lender will require that you purchase Lender’s Title Insurance. The Loan Policy is issued for the amount of the mortgage loan, and assures the lender the validity, priority, and enforceability of its lien. It does not cover the homebuyer. The Loan Policy’s coverage decreases as the loan debt is reduced, and expires when the loan is paid off. When a home is refinanced, the original loan is essentially paid off and a new loan issued, hence the need for a new Loan Policy to assure the lender that no new liens or encumbrances have occurred since the last policy was issues. Reissue rates are available on a refinance and qualifying sales, so you should ask Southern Title if you qualify for a “reissue premium.”
An Owner’s Policy is typically issued in the amount of the real estate purchase price, and remains in effect for as long as the owner, or his or her heirs, retains an interest in the property. As the loan debt is reduced, the Owner’s Policy coverage increases.
An Owner’s Policy is your assurance that Southern Title will stand behind you–monetarily and with legal defense–if a title problem arises after you buy your home. Even the best title search, performed by the most experienced and capable experts, cannot ensure that no title hazards exist. Some problems just aren’t revealed in the painstaking review of available records. Years ago, there may have been an honest mistake in determining the status of title. Or today, a previously unknown heir may come forward to claim ownership of a deceased relative’s property. There might even be a forged deed that impairs the ownership of the property. Bottom line: Southern Title will be there to help pay valid claims and cover the costs of defending an attack on your title. Receiving an Owner’s Policy isn’t always an automatic part of the closing process, however. Be sure to request one, because without it, you could be liable for these costs and legal fees, even if you prevail in a legal action.
DO I NEED A COPY OF THE SURVEY?
When you close on your home, remember to get a copy of your survey and keep it in a safe place with all your real estate related documents. Your final survey shows, in explicit detail, your boundary lines, the exact location of your home, easements that may be located on your property, common areas you may abut, set backs, any encroachments (fences, roadways, swimming pools, outbuildings), fences and roadways. In addition, a surveyor’s elevation certificate is required in order to get flood insurance. Any future construction that you perform on your home, such as a new fence, swimming pool or other structure will require a survey in order to pull a permit. If you are buying, be sure your survey is certified to you as the buyer, and it’s a good idea to make sure your surveyor certifies carries land surveyors professional liability insurance or Errors & Omissions (E&O) coverage to provide protection against any potential survey issues in the future.
WHO CHOOSES THE TITLE COMPANY?
Typically, whoever is paying for the Owner’s Policy of Title Insurance chooses the title company. In most cases, that is the seller. If you are in need of title insurance, please contact Southern Title so we can answer any questions you might have and provide you with a quote.
I’M SELLING, SO WHY IS TITLE INSURANCE IMPORTANT TO ME?
Any prospective buyer will need evidence that his or her investment in your property is free of title defects. In fact, your contract of sale probably requires it. The title insurance policy that you provide the buyer is a guarantee that you are providing a clear title to your real estate, unencumbered by any legal attachments that might limit or jeopardize ownership. The Southern Title name reassures your buyer that the title has passed the most careful scrutiny. In addition, it can help your deal close more quickly and easily.
WHAT DOES SOUTHERN TITLE NEED FROM ME?
From the seller, Southern Title needs a copy of the Contract for Sale and Purchase and a copy of the title policy you received when you purchased the property (the prior title policy), if you have one. If there is an outstanding mortgage, the title company will need the name and address of the lender and the loan number. In addition, a copy of the seller’s existing survey will be helpful. Southern Title will need the name and address of the buyer(s), their new lender, if any, and the name of the buyers insurance company.
WHAT'S IN A TITLE SEARCH?
You've decided to purchase a home and hope to take possession as soon as possible, or you are refinancing you home for a better interest rate. The terms have been agreed upon and all the financial arrangements have been made. But there's one important detail remaining. Before the transaction can close, a title search must be made. The most accurate description of title is a bundle of rights in real property. A title search is the process of determining from the public records just what these rights are and who owns them. A title search is a means of determining that the person who is selling the property really has the right to sell it, and that the buyer is getting all the rights to the property (title) that he or she is paying for.
Southern Title is qualified to handle the search process throughout the state of Florida and in most cases can return that search in 72 hours or less.At that point, Southern Title must determine insurability of the real property as part of the search process. This leads to the issuance of a title insurance commitment which sets out the requirements in order to issue the final title insurance policy.
HOW SHOULD I GO ABOUT SELECTING A TITLE COMPANY?
Ask people you know who have recently purchased property if they were satisfied with their title agency, and get a referral.
•Your real estate agent or lender may recommend one or more title agencies they are familiar with (although they can’t require you to use any particular title agency).
•Contact more than one title agency to compare costs and services. The title insurance premium is set by the state of Florida, but the closing fee may be negotiated.
•Contact the Department of Financial Services to find out whether any complains have been filed against the agency.
•Consider how many transactions does the agency do? Are its closers licensed? How many have earned their CLC designation (Certified Land Closer from the Florida LandTitle Association is the highest designation a title agent can achieve). You can call the Florida Department of Financial Services Consumer Helpline toll free at 1-877-MY-FL-CFO (1-877-693-5236 or visit the website at myfloridacfo.com. If you are dealing with an attorney, contact the Florida Bar Association to determine whether they are a member at 800-342-8060 or www.floridabar.org
I HEARD A PROVISION OF THE NEW HEALTH CARE LAW CREATES A 3.8% MEDICARE TAX ON REAL ESTATE TRANSACTIONS. IS THAT TRUE?
It depends. When you sell your home, the new health care legislation imposes a 3.8% transaction tax on profits over the capital gains threshold. So that means, if you sell your home for a profit about the capital gains threshold of $250,000 per individual or $500,000 per couple, then you would be required to pay the additional 3.8% tax on any gain realized OVER this threshold.
Most people who sell their homes will not be impacted by these new regulations. Be sure to consult with an accountant with anytax related questions regarding your real estate sale, purchase, or refinance.
WHAT IS ESCROW?
Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.
WHY DO YOU ONLY ACCEPT WIRED FUNDS?
There have been an overwhelming number of fraudulent cashier’s checks in circulation, forcing title companies to have “collected” funds (meaning they are available for immediate withdrawal) prior to closing. The new FAR BAR contract requires collected funds at closing (as stipulated in the Florida Administrative Code 690-18608). A wire transfer will allow funds to be immediately available at closing; unfortunately, a cashier’s check could delay the transaction until the check is cleared.
HOW CAN I WIRE FUNDS TO SOUTHERN TITLE?
Southern Title appreciates the opportunity to assist you with their home purchase. In order to comply with industry best practices and protect the integrity of the transaction, we have implemented new strategies to ensure secure wire transmissions and mitigate any security potential breach.
Earnest Money Wire Deposits:
If you would like to wire Southern Title the earnest money deposit, please provide the buyer’s name, current address, mobile phone number, email address, and the address of the property you are purchasing to Southern Title so we may securely provide the wiring instructions to the buyer. Please either provide a contract or call before wiring funds so we may properly assign the deposit to the correct file.
Cash to Close Wire Instructions
Southern Title will securely transmit wire instructions to the Buyer(s) via ClosingLock, a secure platform for transmitting wire instructions. We will need the Buyers' email address and mobile phone in order for the wire instruction transmittal to be multi-factor authenticated. If you aren’t able to receive wire instructions via email or your mobile phone, please let your Closing Officer know so she can arrange another method for secure delivery.
No other wire instructions will be transmitted in order to mitigate any security breach and safeguard your accounts and your personal information.
Why is Southern Title taking these precautions?
Wire fraud has become quite prevalent in real estate transactions and Southern Title is instituting this process in order to prevent hackers from diverting your funds to the wrong account. Industry Best Practices require our compliance with security standards to protect your privacy, personal information and escrow funds. Please feel free to contact us if you have any questions.
WHY ARE YOU SENDING ME ENCRYPTED EMAILS?
In order to protect your identity and comply with regulations governing the protection of your Non-public Personal Information (NPI), email communications from Southern Title will be encrypted. You will be guided through a simple process of logging into to a portal to read the first email. Subsequent emails will require the same email/password combination. If you aren't able to access email or communicate electronically, please call our office and we will work with you get the information we need securely.
WHAT IS TRID?
TRID is an acronym for TILA-RESPA Integrated Mortgage Disclosures and it encompasses changes to the loan and settlement disclosure forms. These changes went into effect October 3, 2015 and are the result of new regulations issued by the Consumer Financial Protection Bureau, the consumer protection agency created by the Dodd-Frank Act of 2010. Dodd-Frank mandated the combination of the Truth in Lending Act (TILA) loan disclosures with the Real Estate Settlement Procedures Act (RESPA) Good Faith Estimate and HUD-1 Settlement Statement disclosures.
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