- Earnest Money
- Title Search
- Title Insurance
- Escrow Services
- Closing Costs
Earnest money is the money you as the buyer give to the seller to reserve the right to purchase their property.
After you sign the contract and they accept your earnest money, they cannot legally sell it to someone else unless the contract has been appropriately cancelled.
The earnest money amount is usually a very small percentage of the purchase price, often .01% or less. It’s enough, however, that you don’t want to lose it if the sale doesn’t go through.
So you give it to us, the title company, and we hang onto it for you. It doesn’t go to the seller.
If you end up not purchasing the property, we’re in charge of giving it back to you. If your sale does go through, we’ll put it toward the purchase price so you have to bring in less money on closing day.
If you want to buy a property with a loan, it needs to have what’s called “clean title.” Lenders will only let you use their money if their loan is the only one attached to the property. There can’t be any liens, overdue taxes, or claims associated with the previous owner.
Clean title is determined by a title search, which works like this:
Shortly after you or your realtor send the purchase and sale agreement to us, we get to work. We search county records to discover things like:
• Any liens have been filed against the seller
• Late property taxes that might be still owing
• Unexpected claims on the property
If anything is amiss, we work with the seller to take care of it.
Occasionally, homeowners are unaware that liens have been attached to their houses. For example, we know of someone who discovered a lien that had been placed by a state he’d moved from, because the state thought he’d earned money there and not filed taxes.
In reality, no lien should have been put on the property because the person hadn’t earned any money in that state for the year in question. However, the lien had to be removed before the new buyers could close on the house.
The good thing about liens and overdue taxes is they don’t keep homeowners from selling their properties - they’ll just walk away with less money, because anything owing will be paid from the proceeds of the sale.
We also look at several other things in a title search, such as:
• Whether the seller actually has the right to sell the property. Sometimes if it’s an inherited property, the heir doesn’t realize they need to go through probate first.
• Anyone else that would have a claim on the property. There are sometimes issues with divorced individuals.
• Erroneous surveys, unresolved building code violations, falsified documents.
• Any other issues that look questionable.
We’ll make sure we all the answers cleared up before telling you and your lender that the title is “clean.”
After the title search is finished, the parties involved want assurance that it was done properly and nothing will come up in the future that proves the seller did not have the legal right to the property. That’s where title insurance comes in.
There are two kinds of title insurance:
• Lender’s title insurance, which protects lenders against loss. Almost all lenders require it, and it means they’ll always get their money back, even if there’s a title problem that comes up after closing.
• Owner’s title insurance, which does the same thing for the buyer. It’s usually optional, but highly recommended, and can actually be purchased at any point during ownership of the house.
According to Investopedia, “Escrow is a legal concept describing a financial agreement whereby an asset or money is held by a third party on behalf of two other parties that are in the process of completing a transaction.”
Escrow services benefit both buyers and sellers. Although earnest money is the most commonly used example of escrow, many others exist as well.
A common one is when a house needs a new roof before it can qualify for a loan. If the sellers don’t have enough money to pay for such a large expense out of pocket, they might be able to set up an arrangement with the lender so that fixing the roof comes out of the proceeds of the house.
The process could look something like this:
• The seller schedules a roofer to put a new roof on the house for $10,000 after it’s sold.
• The house closes.
• Titan Title deposits the proceeds into the seller’s account, minus $10,000.
• The roofer puts on the new roof.
• Titan Title pays the roofer for work completed.
As you can see, escrow services are a valuable part of our services, and we’re happy to be able to offer them in St. Petersburg, Fl and Tampa, FL.
Buying or selling a property definitely isn’t the cheapest thing you’ll ever do. And when people talk about the associated cost, they generally lump all the charges together into one term called “closing costs.” However, when you get your closing statement, you’ll see them broken out.
Title Insurance is the most expensive part of “closing costs,” but here are some of the other items that are generally paid by either the buyer or seller:
• E-file fee
• Long-term escrow fee
• Closing fee
• Reconveyance fee
• Recording fee
• Wire fee
• Lender required fees
• Fees specific to your transaction
Before buying or selling a property in the Tampa Bay metro, talk to your realtor or your Titan Title escrow officer to make sure you understand all the associated costs.
Sometimes homeowners have the opportunity to take advantage of the equity in their properties by refinancing. This means getting a new loan with different terms, like a longer payment term or a lower interest rate. Sometimes you can even get cash out of your house.
The new loan could be with the same lender or a different one, and you’ll go through a regular closing just like you did when you first bought the property.
Whether you need to refinance your personal home or a rental property, Titan Title is here to make it as easy and stress-free as possible!