What to Expect at Settlement
(Escrow/Closing)
You’ve found the home you want, and your offer was accepted! Now all that needs to be done is to finalize the funding and paperwork. Here are a few basics to help you understand the steps before the keys to the front door are placed in your hand.
Frequently Asked Questions
Settlement
What Is Settlement?
Also known as “closing:” closing is part of the process by which ownership of a property is transferred from one party to another. Completing all of the steps necessary for the final contracts to be signed takes about a month, but in some cases. closing can take from 30 to 90 days.
What Are Closing Costs?
Closing costs cover the services required for a property to change hands. Services required to process the property transaction include title work, appraisals, inspections, document preparation, recording fees and other expenses.
How Much Are Closing Costs?
Mortgage Costs: Loan origination fee, document preparation, points, commitment fee, underwriting fee.
Outside Vendor Costs: Appraisal, credit report, flood determination fee.
Title Costs: “Closing” Settlement fee, title/abstract search, title insurance premium (for the lender’s and owner’s policies).
Government Fees: Title recording and transfer tax fees.
At closing, you’ll also face the cost for “pre-paid items,” which cost another 1% to 2% of the purchase price. The pre-paid items usually cover upfront payment of typical “year one” costs of home ownership, such as homeowner’s insurance premiums and real estate taxes.
Do I Need Owner's Title Insurance?
Buying a home is one of the biggest decisions and financial investments you’ll ever make. To the extent of the matters set forth in the policy, an owner’s title insurance policy provides certain protections in connection with title mistakes and irregularities that occurred prior to the issuance of the policy. Dollar for dollar, it’s one of the most cost-efficient forms of insurance for homeowners. The relatively low, one-time title insurance premium covers you against pre-policy title defects that could otherwise cost tens of thousands of dollars and even the loss of your home, for as long as you own your home.
What is Escrow?
An escrow is on arrangement in which a neutral third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and seller. The escrow holder distributes funds and documents according to the buyer’s and seller”s instructions. By acting as a neutral third party on behalf of the buyer and seller, the escrow holder can save time and facilitate the real estate closing.
What Do I Need to Bring to Settlement/Closing?
Buyers and sellers need to bring approved photo identification, such as a valid driver’s license. Confirm with your settlement agent about the form in which any money you owe should be submitted.
Falling in love with the right home. making an accepted offer, getting prepared to become the new owner. All that stands between you and the front-door keys is the closing. Take the final steps to realizing your dream by discovering what you need to know about your real estate settlement. An escrow holder wfll act as a neutral third party and carry out the mutuallyagreed instructions of the parties.
Why You Need Owner's Title Insurance
What is title insurance?
Owner’s title insurance protects your right to your home. By searching, clearing and insuring the title to your home before you buy it, your owner’s title policy offers protection for your property rights for as long as you and your heirs own your home. If ownership of your property ever comes into question, an owner’s title insurance policy protects you from expensive legal problems that could result in the loss of your home.
Frequently Asked Questions
Owner’s Title Insurance
Do I "HAVE" to Purchase Title Insurance?
The answer depends. If you are using a lender to finance the transaction (such as a bank or a mortgage company), the answer is almost undoubtedly yes. The lender will require the borrower/buyer to purchase the policy to ensure that the lender is loaning against a property that the borrower/buyer can legally purchase and one that will be free from other liens or title defects that could impair the lender’s interest in the property in the event they had to foreclose on the property.
So, What if I'm Not Using a Lender, Should I Buy Title Insurance?
Absolutely! The purchase of a home or any real estate is one of the biggest financial investments you can make and you should take every opportunity to protect yourself from losing that investment. Title insurance is the most effective means of protecting yourself from serious financial loss due to a claim which would arise regarding your right to the ownership of a piece of property. It is possible that even the most rigorous title examination may not reveal all the defects in a property’s history. So, in addition to covering any financial loss you may incur (up to the total amount of your insurance), the title company or its underwriter will pay the cost of defending your title against any covered claim.
How Much Does Title Insurance Cost?
The charge for your title premium is directly related to the value of the property. The premium itself is regulated by the state and that rate is required to be charged. So our company, nor any title company has the ability to adjust or compromise the price of the premium. Typically, the cost is reflected in the sales price of the property, however if you are purchasing unimproved, vacant land and you can substantiate the future value of the completed project, you may purchase a title insurance policy to cover the improved value of the property.
Are There Other Costs to the Service?
Yes, all title companies charge for the preparation of a deed, other deal documents and the process of preparing the closing documents and for performing the closing. This is where our company can save you money. We are very economical in our pricing of these fees. Give us a call and we will let you know what we can do in your case.
Address
700 McKnight Park Drive
Suite 710
Pittsburgh, PA 15237
Phone
412-367-0901
docs@pennbridge.net