Closing Costs- How much is title insurance?

Buying property is often the biggest purchase someone makes in their lifetime. The cost, in both time and money, when purchasing property can be extremely taxing, and at ZSPA, we are committed to making this process as swift and smooth as possible, by providing the utmost in customer care and maintaining open lines of communication with our clients.

I am here to keep you informed on what to expect from your home purchase, and that includes closing costs. There are closing costs associated with every real estate transaction, whether it’s an all cash deal or seller or lender financed. Although I always suggest contacting your lender first to verify your lending qualifications and ability to borrow, I have included here some of the costs to be expected when purchasing a home. These costs are usually bundled into your closing costs and evidenced on the settlement statement– the closing disclosure or HUD.

One of the biggest closing costs for a home buyer is the cost of title insurance. Title insurance rates are promulgated by the State of Florida, and the rate is based on the purchase price of the property or loan amount for a refinance. The State has set the title insurance rates to protect home buyers and to reduce the need to “shop around” (although we always suggest client’s hire a qualified real estate attorney to handle your title and closing needs.)

You can calculate your title insurance premium here.

The sample settlement statement pictured above includes some of the closing costs to be expected. These prices may vary depending on the transaction.

As always if you have ANY questions, please don’t hesitate to contact me!

 

 

New FAR/BAR AS-IS Contract: What’s New?

 

As of April 4th of this year, the Florida FAR/BAR contract 4/17 has made some critical improvements to the specifications for contracts regarding the sale and purchase of residential property. In this post, we will highlight the most noteworthy changes with the intent of allowing individuals to better understand and recognize how both buyers and sellers are benefitted by the new terms.

First to note is the new terminology—replacing the phrase ‘loan commitment’ with the term ‘loan approval.’ This is important to recognize, as banks rarely issue loans for commitments and instead prefer to use the ‘conditional loan approval’ language on the form. This helps both buyers and sellers better understand the conditions that govern their contract. In addition, buyers’ task list for their loan approval process are more clearly defined. The loan approval timeline and process have been more clearly explained, as well as the trigger for the refund of the escrow deposit.

In addition, the closing agent is now authorized to release preliminary and final closing disclosures to the seller and the listing agent. The new contract also better explains what a municipal lien search is and that those terms searched will be an exception to the title policy, unless the municipal lien search is ordered by the buyer. The seller must also provide the buyer with any information or plans they may have regarding open permits or improvements on the property. The seller is also required to provide proof of closure of open permits.

With these changes, however, the revisions most beneficial to the buyer concern code violations and open permits. The seller is required to ensure that no facts materially affecting the value of the Real Property which are not readily observable and which have not been disclosed to the buyer shall be noted in the Seller Disclosure. The buyer may also have an inspection and examination of records and documents that pertain to whether or not any open or expired building permits or unpermitted improvements to the Property—also known as the Permit Inspection. During the inspection period, the buyer shall deliver written notice to the seller of the existence such permits. If the buyer’s Permit Inspection identifies permits which have not been properly closed or not permitted, the Seller shall deliver to the buyer all plans, documentation, or other information in the seller’s possession relating to the property.

We conclude with the understanding that these changes seek to assist buyers in recognizing the potential issues that may arise during the purchase of residential property, such as open permits which were previously not a ‘lienable’ item under Chapter 159. This was troublesome, as violations and fines often result in liens from expired permits. The revised FAR/BAR contract 4/17 has better clarified some prior unclear parts of a real estate transaction. For more information about these changes, or to contact a real estate attorney to assist you with your next real estate matter, please click on our contact link and connect with our attorney so we can assist you with real estate needs.

Removing the Facade of Miami’s High End Real Estate Market

It makes sense to look to large cities with a high growth rate when searching for suspicious real estate related activities. That is why it should come to no surprise that in Miami, one out of every three cash purchases in this high-end market can be linked to shady shell companies.

Take Tareck El Aissami, Venezuelan Vice President and drug kingpin, who used the proceeds from his narcotic trafficking ring to fund his limited liability company to acquire approximately $7 million worth of luxury apartments in Miami. Between 2011 and 2013, he purchased three units at the Millennium Tower. Due to the high volume of similar real estate transactions, the U.S. Department of Treasury has initiated a plot program aimed to root out laundered money and other ill-gotten gains… Miami has one of the highest rates of suspicious activity included in the program. Other cities include Brooklyn, Queens, and San Antonio.

Opposition comes from individuals that value the privacy during real estate transactions, such as real estate attorney Russell Jacobs. Jacobs does not support government intervention, believing that individual homeowners should have the right of privacy during legal transactions to use shell companies. Mr. Jacobs conducts seminars with real estate professionals on how to structure real estate deals to avoid disclosure.

While opinions are certainly ranging on this matter, it is important to consult with a legal professional—no matter your individual stance. As Jacobs states, “with [casting] a net this wide, you get people who have done nothing wrong. You are hurting economies.” Working with a real estate professional helps in avoiding these issues.

What is Title Insurance?

Of the varieties of insurances that exist, one of the least-discussed insurance options is title insurance. But what exactly is title insurance?

Insurance, in general, is the protection against loss, and as a homeowner there are specific insurance policies you might want to consider. These policies consist of hazard insurance, or homeowners’ insurance, life insurance, and title insurance. Title insurance is an insurance policy which protects you from unanticipated third party claims to ownership of your property. Unlike automobile insurance which protects against FUTURE events (the car accident you may get into, title insurance protects against historical matters with respect to your property, for example defects in title that already existed but which were NOT discovered during the escrow period. This distinction highlights the importance of having a diligent professional, an attorney title agent, on your transaction, as a thorough search can make all the difference in your title insurance policy.

While title insurance may be an optional insurance policy for some purchasers, with most real estate experts recommending that you always opt to purchase it, purchasing title insurance for your lender is required. The obligatory lender policy is due to the fact that the lender also has an interest in your property and rights to marketable title.

There is no “one size fits” all title insurance policy. Policies protect against many different types of title defects. An unrecorded easement is an example of a common title defect. This may be an encroachment on your property by a neighboring fence or continuous use of a portion of your land. A more serious title defect would be that the new home owner faces an ownership dispute because country records indicate that the seller who sold the home did not in fact own it, and falsely conveyed title. In this case, the home buyer could face losing the home. However, if you have an owner’s title insurance policy, when a claim against your title is made, your title insurer will research the claim on your behalf, pay for all litigation and attorney’s fees incurred in defending the matter, and if necessary, make you whole for any insured loss. This may include paying your remaining mortgage balance in full.

Title insurance is purchased at the time of closing and is a line-item on your settlement statement. It is a one-time cost and is not paid annually. Policies for a refinance transaction are often significantly less than those for a purchase. Your lender can assign your title insurer, or you may comparison shop on your own. But note, all insurance premiums are highly regulated and there are state mandated rates, therefore the premium rates will not vary. Even more the reason to hire an attorney title agent to work on your next closing.  For a quote on closing costs please contact our offices for a free estimate!

What to Expect at your Closing

What to Expect at Your Closing?

After months, maybe even years, of searching for the perfect home, you’ve finally found the property of your dreams. You may think that the hardest part is over: you’ve negotiated a deal and sorted out your financing situation, BUT did you know that 80 % of your real estate transaction occurs AFTER you’ve entered into a valid contract? Not to fret because we have all your “Now what?” and “ How to?” questions covered here… Continue reading “What to Expect at your Closing”