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House for Sell "By Owner" or use an
agent? Request FREE
list of comparable home sales. Potential Defects in
Titles Real estate closings
should be a stress-free experience for all involved. The Seller is receiving
money, the Purchaser is acquiring a new home and the professionals handling
the sale are getting paid. Our 70+ years of combined experience at Liberty
Title Agency can help make sure your closing is a smooth one. The keys to a smooth
closing are good communication and preparation. Your title company plays a
key role in both areas, by acting as a clearinghouse for information and as
an independent third party to handle the funds, prepare many documents and
manage the closing process. The following sections
offer a brief idea of the closing process, explain closing costs, and offer
some tips for a smooth closing.
This begins with the
signing of the Purchase Agreement. This document states what the Seller and
Buyer have agreed to and sets out a timeline for the closing process. This
agreement will identify the property address, purchase price, and determine
closing costs. (Click
here to go to our forms section for a sample Purchase Agreement.) At the same time they
sign the Purchase Agreement, the Purchasers will usually give an earnest
money deposit to either the real estate broker or title company to secure
their performance under the Purchase Agreement. Both Purchaser and Seller
then proceed to remove contingencies and prepare for the closing. On the
Purchaser's side this usually means finding financing and hiring inspectors.
On the Seller's side, this means hiring a title company, obtaining payoff
information on the existing mortgage and making any repairs required by the
Purchase Agreement. As a "one stop shop" Liberty Title Agency will
handle all termite inspections, surveys, and obtain payoff information. When all the
requirements are removed, the Seller and Purchaser work together with the
title company and Purchaser's lender to establish a time and place for a
closing that meets the parameters established by the Purchase Agreement.
Liberty Title Agency has 5 offices and is growing, and we gladly host
closings at any of our locations. We also know in today's busy times that
getting places can be difficult, so we also provide mobile closings and will
be glad to come to you! Once a closing date and
time have been established, the title company will coordinate the activities
of the Seller, Purchaser, Purchaser's lender and other parties involved in
the closing. Closing documents are
distributed by the title company to the parties, their counsel and/or the
real estate agents for review. This often happens very shortly before the
closing, so do not be surprised if you receive your final closing figures the
day before documents are signed and funds are exchanged.
Closing Costs is a term
that refers to the costs and expenses involved in closing a real estate
transaction. These costs are determined by the contracts between the parties,
applicable laws and local customs. The following
explanation of costs is based upon a "typical" transaction and
assumes typical mortgage closing expenses: Seller Closing
Costs. 2) Owner's Policy
(Title Insurance) - A Seller normally purchases a title insurance policy for
the benefit of the Purchaser. The amount is based on the purchase price, so
please contact our office for a specific quote. A re-issue credit can also be
issued if you are able to produce the current owner's policy for the
property. 3) Closing Fee - This
is a general transaction management fee. It includes handling all aspects of
the closing documents, acting as the escrow agent, and preparing the
documents. This fee is on average $150.00. 4) Title Search and
Examination - This cost is usually paid by the Seller because they must show
marketable title to the Purchaser. The search fee varies by county but will
be between $65.00 - $250.00. The title examination fee for simple title
examination can be $100.00. For complicated transactions and commercial
transactions this figure will be higher. 5) Real Estate Commission
- If a real estate broker or agent is involved in the transaction, the Seller
will normally pay a commission of approximately 6% of the sale price. This
cost will be determined in the Purchase Agreement. 6) Mortgage Payoffs -
Payoff statements will be obtained by our title company, the payoffs will be
collected on the Settlement Statement at closing, and overnighted to that
specific lender. The Seller should be careful to not use their home equity
credit line prior to closing and will need to bring in all unused home equity
checks and debit cards to closing. 7) Payment of
delinquent taxes - All delinquent taxes will need to be paid to allow
recording of the Deed. 8) Miscellaneous - Any
attorney's fees if the Seller obtained an attorney and courier fees to
Airborne Express will be paid by the Seller for loan payoffs.
Sellers can also expect
to receive credits that will supplement the Purchase Price. The largest
credit is the "tax pro-ration" which is a reimbursement to the
Seller by the Purchaser for a portion of the property taxes paid by the
Seller in the year preceding the closing. Credits may also be given for
homeowners association fees. Purchaser Closing
Costs. 2) Closing Fees - This
is a general transaction management fee. It includes handling all aspects of
the closing documents, acting as the escrow agent, and preparing the
documents. This fee is normally $150.00. 3) Inspection Costs -
This includes the termite inspection and survey of the property. This will
vary depending on the companies used and the size of land for the survey. 4) Recording Fees -
Recording fees for doc stamps and intangible taxes on the mortgage as well as
the recording of the mortgage itself, is the responsibility of the Purchaser.
Loan Closing
Costs In addition to these loan closing costs, the Purchaser will also need to pay the prepaid interest and escrow deposits. The prepaid interest is a charge by the lender to cover the interest accruing on the loan for the remainder of the month during which the closing takes place. Escrow deposits are the funds given to the lender so that they can pay for the property taxes, homeowner's insurance, and if applicable, private mortgage insurance (PMI). |
