The Seller
Real estate commission
Title Insurance premium for the Owner's policy
Escrow fee (one half)
Payoff of all loans in Seller’s name.
Interest accrued to lender being paid off.
Home warranty (or according to the contract)
Any judgements, tax liens, etc., in Seller’s name.
Any bonds or assessments
Accommodation signing fees for mail-out closing, if applicable
The Buyer
All new loan charges
Prorated interest on new loan
Escrow fee (one half)
Title insurance premium for Lender’s policy
Homeowner’s insurance premium
Inspection fees
Accommodation signing fees for mail-out closing, if applicable
Tax proration (from date of acquisition)
Recording charges for all documents in Buyer’s name.
Explaining & Title Insurance
Top 3 Reasons You Should Have It
What is Title Insurance?
Title insurance is different from other forms of insurance because it insures against Events that occurred before the title policy is issued, As opposed to ensuring against events in the future, as health, Property and life insurance do. Title insurance is in essence loss prevention insurance.
When purchasing real estate, It is of utmost importance that you receive clear title to your property. In order to do so, you must first be informed of any existing rights or claims that may be asserted against the property, Then any of those rights or claims that are unacceptable to you must be resolved or extinguished prior to your purchase of the property.
In Texas, many property records go back to grants from 1880's, hence it is important that the full history of the property is thoroughly researched and presented to you.
When is the premium paid?
Unlike other forms of insurance, for a relatively low one-time premium, the original title premium is your only cost of protecting you as long as you and your heirs own the property. The premium is paid at closing and there are no annual payments to keep your Owner's Title Insurance Policy in force. Rates for title insurance are regulated by the state and are promulgated in Texas.
Top 3 Reasons Why You Should Have Title Insurance
A property may have changed ownership multiple times over the year through events such as sale, marriage, divorce, inheritance, foreclosure, Bankruptcy, etc. Title insurance provides you the assurance that a comprehensive search and review of public records has been performed from potentially hundreds of sources including tax records, federal, state and local records, court judgements, and deeds in order to call to your attention any discovered the rights and claims against the current or pass owners that could have been impact upon title of the property. Once reported to you, these matters can be accepted, resolved or extinguished prior to closing the transaction.
Title insurance also provide coverage for future claims or future losses That could threaten ownership of the property due to undiscovered title defects covered by the title insurance policy that are not shown in the public records such as forgery, incompetence, in capability of the parties, fraudulent impersonation and unknown errors in the records created by some past event.
Title insurance helps speed up negotiations when you are ready to sell your property or obtain a loan. Existing title insurance policies can help eliminate delays when passing your title onto someone else. Title insurance also cover attorney's fees and court cost for covered claims. Claims will be disposed of, or you will be reimbursed exactly as your title policy divides.
Defining the Title Commitment
The title commitment is a commitment to issue title insurance. it is broken down into four parts of schedules. They are Schedules A, B, C, & D.
“A” is for “Actual Facts.”
This is where you will find the who, what, where and how much information. The most important information here will be the same of the person who holds the existing title, the legal description of the land and the name of the proposed insured (buyer), The sales price and the name of the lender. All parties are the title company should make sure all of the information is accurate when it is compared to the sales contract.
“B” is for “Buyer Notification”
This is the section of the title commitment that addresses where other parties have any interest or control of the use of the property. Examples of this are utility easement and building setbacks. A utility easement Is a common item to find here. this would be a part of the land that a utility company has the right to use. A setback prevents the owner from building a certain distance from a property line. Schedule B is also the section in which exceptions will be noted. Exceptions in this case are anything that will not covered by title insurance.
“C” is for ”Clear to Close.”
This is the section in which any issues must be resolved before the buyer can close the property. Common issues here are an existing mortgage that needs to be paid off, a marital status issue or unpaid taxes and liens on the property.
“D” is for “Disclosure.”
This final section outlines all parties to who will collect any part of the insurance premium including underwriters, title agents and attorneys. it will also show the amounts being paid for the owner's title insurance policy, the mortgagee policy amount and any endorsements.
Smooth Closing
CHECKLIST
AT LISTING
Request a copy of the prior survey from your client. If the parties of the contract have agreed to use a prior survey, present it to your title company for review when you receive the contract.
Request HOA information. This helps your title company support you in meeting contracted lines.
Determine your client marital status at listing for the entire time they have own the property. If there has been a divorce or marriage during the ownership period, please inform your escrow officer.
Request loan payoff information at the time of listing: Name of bank, social security number, loan number and an estimated principal balance for all loans on the property. This will help your closer if you need an estimated closing statement/ net sheet, and will facilitate obtaining an official payoff statement more quickly.
AT THE CONTRACT AND EARNEST MONEY DELIVERY
Contract signed by all parties including any initialed changes made to contract and all dates completed
Earnest money check attached and made payable to your title company and/or obtain electronic information.
Contact information for all parties including addresses phone number and emails
Any applicable exhibits or addendums
DURING ESCROW
Inform your closer if the transaction is linked to another closing e.g., if the Sellers need the proceeds quickly per a purchase, or if the Buyers funds are coming from another closing.
Inform your closer if your clients are first-time Buyers or Sellers. The title company will appreciate the opportunity to plan extra time with your clients to make sure all their questions are answered.
Inform your closer about any special circumstances, for example, your clients are not US citizens, do not speak English or have a disability. The title company will appreciate the opportunity to plan in advance to take care of your client’s special needs.
If a power of attorney is being used, please notify both the title company and the lender well before closing. They will need the original document at closing and are legally required to contact the person granting the power of attorney on the day of closing.
ADDITIONAL ITEMS TO DISCUSS PRIOR TO CLOSING
Whenever possible, avoid scheduling your closing during the last few days of the month. your clients will enjoy more options when scheduling closing appointments and less minute changes or issues will be easier to resolve.
Make sure your clients bring ”good funds” to the closing table, either a cashier’s check or wire transfer.
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