Frequently Asked Questions
Whether this is your first purchase or you are a real estate veteran, the settlement process can sometimes be confusing. Homestead Title of Pinellas, Inc. wants to help you understand what goes on before, during and after the day that you sit down and sign all the formal documents. Here are some of the questions we hear most often from our clients.
What does Homestead Title of Pinellas, Inc. do?
As a title and escrow company, Homestead Title has many functions. The processors and closers work with lenders to make sure all title, survey, insurance and other requirements are met. We resolve title issues and last minute loan changes, coordinate with buyers, sellers, real estate agents, and lenders ensuring the closing goes smoothly. We notify pertinent parties of any problems that arise, record documents, disburse funds in accordance with the settlement statement, and hold funds in escrow in accordance with buyer and seller instructions. Finally, we issue the necessary title insurance policies.
What is a title search?
Our first step after receiving the signed sales contract is to verify the information in it with the parties and perform a title search for the property. Our abstractors conduct a search of the land, judgment, and other official county records where the property is located. This “search” generates a comprehensive report outlining anyu possible problems with the title of the property. We examine the report to determine what documents will be required to insure the conveyance or refinance of the property.
Why do I need a title search and examination of title?
A title must be deemed “good and marketable” before the settlement process can continue. The results of the title search identify (among other things) the current owner of the property, any liens on it, and any limits on how an owner can use the property. Our examiners will review the title search report to determine what (if anything) must be done in order to clear the title to the property so that the buyer can obtain its (and its lender’s) goal of a “good and marketable” title. If the title to the property is not found to be insurable then it is not recommended to purchase or refinance the property.
What is a location drawing/survey?
A location drawing or survey is a physical drawing done by a surveyor hired to complete this task. Depending upon the type of survey required, it may show any or all of the following: legal boundaries; location(s) and size(s) of any buildings on the property; set-back lines; easements; and any other restrictions and information. It is advisable to determine whether a prior survey exists. A recertification of a prior survey is normally less costly than a new survey.
Will I get a location drawing/survey?
Whether or not you get a survey on your property depends on several things. As a buyer you need to have a survey done to insure there are no major defects with the land and its improvements. Most contracts leave it up to the buyer to decide if they wish to purchase a survey. If you are paying cash for the property there is no requirement for a survey. If you are obtaining a new loan to purchase the property then a survey typically will be required. The lender wants specific title insurance coverage pertaining to the boundary lines of the property. Coverage can only be given by the title company if they review and approve a copy of an acceptable survey. Survey’s are not required on “most” Condominium purchases. New surveys are generally not required when you are refinancing your property, providing you have a copy of a survey from when you purchased it and you can give written assurances that you have not made any changes to the outside exterior of the property (including adding a pool or fences).
Why do I need a location drawing/survey?
Most lenders require a location drawing of the property to ascertain that others (such as adjoining property owners) have not encroached on the property being purchased, improvements on the property neither extend beyond the lot’s legal boundaries nor are placed over easements of record, and there are no violations of building restriction lines or other regulatory restrictions. Our examiners will review the completed drawings, and if any problems are found, Homestead Title of Pinellas, Inc. will work with all of the parties involved to find an acceptable solution that allows the closing to move forward.
What is title insurance?
Title insurance protects against a loss to the lender or the owner in the event that the title to the property is other than as insured. Title insurance is an essential part of virtually every residential and commercial real estate ownership transfers. It is purchased at settlement, and the title insurance policies are issued shortly thereafter. Although it can be one of the higher costs of closing, buyers should be aware that it protects them against potentially disastrous losses.
There are two (2) types of title insurance policies: lenders and owners. Lender’s title insurance is required by lenders to protect their interest in the property from possible title defects. Buyers have the option of purchasing owner’s title insurance to protect the thier investment. The property value to the buyer is often greater than the loan on the property. Notice that while the lender’s policy expires when the loan is paid off, the owner’s policy continues as long as the owner has a vested interest in the property. It is important to realize that title insurance premiums are paid only once, at the closing. Owner’s title insurance cannot be purchased after the closing except in connection with another transfer or a full title search concerning the property.
Why do I need title insurance?
The concept of title insurance is generally misunderstood. Unlike most insurance which protects against the risk of future events, title insurance exists to eliminate losses due to title defects which occur as a result of things that happened in the past.
Even the most careful title search will not reveal some situations or events that could cast doubt on your title to the property. Title insurance policies generally cover losses for mistakes made in researching, abstracting and examining the title as well as losses caused by items that cannot be discovered by examination of the public records. These include things such as mistakes in the public records themselves, fraud or forged title instruments or documents, undisclosed heirs to the previous owner, adverse possession, and other undisclosed prescriptive rights, etc. A title insurance policy will financially protect the insured party by paying its legal defense fees and monetary claims, should unexpected items that are not of record arise.
What does title insurance cost?
Specific premium costs for a policy are easily calculated upon request. In addition to the title insurance premium, a fee for preparation of the title insurance commitment/binder is a line item that will appear on the settlement statement.
What happens at settlement/closing?
The culmination of everything is the “closing”. Our bonded and notary qualified closers will explain each closing document and ensure that the buyer and seller sign each where required. They will review a prepared settlement statement (HUD-1 form) showing how all funds are to be handled with both parties.
Whenever possible, parties to the transaction are provided a draft copy of the HUD-1 form in advance of closing for their review. Once the parties approve the figures on the settlement statement, we collect the preapproved buyer’s and seller’s shares of the closing costs. Closing costs may include property taxes, state and local taxes on land sales (recordation taxes and transfer taxes), lender and broker fees, real estate commissions, municipal charges, bills for pest inspections and surveys, the buyer’s homeowner insurance premium, lenders’ and owners’ title insurance premiums, title company charges, and any other invoices or items to be paid or adjusted at closing. Funds are often held in escrow by Homestead Title of Pinellas, Inc. to respond to various items or circumstances agreed to in advance by the parties.
Who will be at the settlement/closing?
Unless otherwise agreed, all buyers, sellers, their respective real estate agents, Lender representatives and mortgage brokers, will attend the closing conducted by the Homestead Title of Pinellas, Inc. closer.
How long will the settlement/closing take?
A refinance closing takes approximately 30 minutes and a sale/purchase lasts approximately one hour. If any complications arise, it could take longer. It is your closing and we assure you we will take as long as necessary to answer all your questions.
What if I will be unable to attend closing?
If a seller cannot attend the closing, please notify Homestead Title of Pinellas, Inc. as soon as possible. We will make arrangements to have the closing documents signed. We can handle that in a number of ways. You may be able to sign off on your documents in advance of the closing. We may be able to overnight the documents to a closer in your area to meet with you to sign off on the documents and overnight them back to us. In some cases a Power of Attorney can be prepared. This document formally appoints someone such as a spouse, relative, or friend to sign the documents on your behalf. This person with proper documentation and identification can attend the closing in your place.
If a buyer cannot attend the closing, a Power of Attorney may be permitted, however, any use of a Power of Attorney must first be approved by the lender. Depending on the lender, We will need all the information on the person attending the settlement in your place. We will ensure the Power of Attorney is prepared and/or reviewed prior to the closing.
What are the "Miscellaneous" items on the HUD-1 form?
Miscellaneous pm yjr HUD-1 form includes notary fees, courier and/or overnight delivery expenses, wire fees, and document reproduction. Many lenders ask us to perform tasks and make transactions custom-tailored to your particular deal. These may result in additional charges. These are itemized on the form.
What if I have other questions?
Our staff are in contact with our office network (voice and email) around the clock. Please contact us at any time.