Here you will find frequently asked questions
about Florida real estate closing related questions. If you
do not find what you are looking for online, please contact
us and we will be happy to assist you.
What is a Real Estate Closing?
A closing (also known as settlement) is the
final step in executing a real estate transaction. The closing
date is set during the negotiation phase, and is usually
several weeks after the offer is formally accepted. On or
before the closing date, the parties comply with the terms
of the purchase contract, and ownership of the property
is transferred from the seller to the buyer in exchange
for an agreed upon compensation. Ownership is officially
transferred when the Warranty Deed is filed at the office
of the County Clerk of the county in which the property
What is a title search
and why do I need one?
A title search is a search of the public records
to determine (1) if the seller has a saleable (often referred
to as marketable) interest in the property and (2) if any
liens exist on the property which need to be paid off at
closing, such as mortgages, back taxes or other assessments.
A search of the U.S. Treasury’s “Specially Designated
Nationals and Blocked Persons List” is also performed
as part of the title search.
What is title insurance?
Title insurance is indemnity insurance against
financial loss from defects in title to real property and
from the invalidity or unenforceability of mortgage liens.
It is meant to protect an owner's or lender's financial
interest in real property against loss due to title defects,
liens or other title related matters. It will defend against
a lawsuit attacking the title as it is insured, or reimburse
the insured for the actual monetary loss incurred, up to
the dollar amount of insurance provided by the policy.
What are the different
types of title insurance?
There are two types of title insurance policies.
(1) The Owner’s Policy assures a purchaser that the
title to the property is vested in that purchaser and that
it is free from all defects, liens and encumbrances except
those which are listed as exceptions in the policy or are
excluded from the scope of the policy's coverage. It also
covers losses and damages suffered if the title is unmarketable.
The policy also provides coverage for loss if there is no
right of access to the land. (2) The Lender’s Policy
or Loan Policy is issued only to mortgage lenders. The basic
elements of insurance they provide to the lender cover losses
from the following matters:
The title to the property on which the
mortgage is being made is either not in the mortgage loan
borrower’s name; is subject to defects, liens or
encumbrances; or is unmarketable
There is no right of access to the land
The lien created by the mortgage is invalid
or unenforceable; is not in first lien position (if insured
as such), or is subject to mechanic's liens under certain
Why does is cost so
much and how long is my coverage?
The title insurance premium is regulated by
the state. The rates may include discounts if title insurance
is ordered within a specified time after the last policy
issued or if the mortgage being insured is a refinance of
an earlier mortgage. Coverage is for as long as you own
must I bring to the closing?
You will need to bring your driver’s
license or another form of photo identification for Notary
to confirm your identity. If money is owed, you will need
to bring the certified funds via cashier’s check,
money order or have the funds wired ahead of time.
What type of documents
will I be signing?
The number and type of documents vary by the
type of closing. Both parties will need to sign the settlement
statement and a few closing documents to confirm that the
terms of the contract have been satisfactorily complied
with. If the purchaser is obtaining financing, his/her lender
will require several loan documents to be executed at closing.
Also, if a 1031 exchange service is used, additional documents
will be required by that company to complete the corresponding
transfer of funds.
Do I have to come to
your office to sign documents?
Although we would enjoy meeting you in person,
you are not required to close in our office. We can overnight
the closing documents to you. Because at least one document
will require a notary seal, we recommend you locate a local
notary public before your closing date.
Can someone else sign
Sometimes. You can execute a Power of Attorney
form which states that you are permitting another person
to sign on your behalf. If you are purchasing property and
obtaining financing, your lender has to approve the use
of the Power of Attorney before final loan documents can
What is a 1031 Exchange
and how can it benefit me?
IRS Code Section 1031 permits the deferral
of capital gains and other taxes on the sale of property,
provided certain conditions are met. Depending on the value
of the property, this can be a significant savings at tax
time. Generally, the proceeds from one sale are used to
purchase a like-kind property; however, there are several
different types of 1031 exchanges, so we recommend consulting
a qualified 1031 exchange intermediary for details.
What is a Short Sale?
A short sale is when a bank or mortgage lender
agrees to discount a loan balance due to an economic or
financial hardship on the part of the mortgagor (borrower).
This is typically negotiated through a bank's loss mitigation
department. The home owner/debtor sells the mortgaged property
for less than the outstanding balance of the loan, and turns
over the proceeds of the sale to the lender in exchange
for a release of the lien created by the mortgage. In such
instances, the lender would have the right to approve or
disapprove a proposed sale and may, in some cases, still
hold the mortgagor responsible for the outstanding balance
of the loan. A short sale typically is executed to prevent
a home foreclosure. Often a bank will choose to allow a
short sale if they believe that it will result in a smaller
financial loss than foreclosing.
How can I avoid a
A foreclosure is the legal process by which
a bank, mortgage company, or other lien holder takes ownership
of your home because you have failed to make your payments
at the appointed time. The simple way to avoid foreclosure
is to make your payments on time, but this is not always
possible. The Department of Housing and Urban Development
(HUD) has some helpful tips for avoiding foreclosure on
their website (www.hud.gov/foreclosure), such as talking
with your lender about options/assistance available; knowing
your mortgage rights (what your loan documents say and Florida’s
foreclosure laws); and contacting a HUD approved housing
counselor for advice and assistance.
How do I qualify for
a VA or FHA loan?
Both a VA loan and a FHA loan are secured
by the federal government, which can allow for lower down
payments, better interest rates, and/or better loan terms
than a conventional loan. A VA loan is secured through the
Department of Veterans Affairs and is only available to
qualified veterans. A FHA loan is secured through the Federal
Housing Administration and is open to everyone who qualifies,
but more specifically helps those with less than perfect
credit and/or a small down payment qualify for a loan. (Please
keep in mind, these are only 2 of many lending options.)
What is escrow in
Escrow is a legal arrangement in which an
asset (such as cash, real property or other tangible asset)
is deposited into safekeeping (e.g., a bank account) under
the trust of a neutral third party (escrow agent) pending
satisfaction of contractual contingency or condition(s).
Once the condition(s) has/have been met, the escrow agent
will deliver the asset to the party as prescribed by the