Frequently Asked Questions
Here is a list of commonly asked questions. Please feel free to call our office if what you are looking for isn't on this page.
01. What is a closing agent?
A closing agent is a impartial third party that follows the instruction of your lender, realtor, attorney or buy-sell agreement to complete the sale or purchase of your property.
02. What happens at the actual closing?
The closing officer will explain all documents to you and answer any questions you have. You will then sign the necessary papers and the closing officer will notarize them.
03. What is Earnest money/Down payment?
Earnest money is the funds put down by the buyer and held in an account till closing by a neutral third party.
04. What kind of property can be closed through Tri-County Land Title & Escrow?
Any residential, commercial or agricultural property within the State of Florida.
05. Can Tri-county Land Title & Escrow assist me with selling my property?
Yes! Tri-County Land Title can act as the settlement agent for Buy Owner transactions. We can draft the contract for the buyers and sellers, hold the escrow deposit, and prepare and record all closing documents except for lender documents that will come directly from lender.
06. What are the traditional sellers' closing costs?
It is standard practice in this area to hold the seller responsible for the title insurance, title search, and documentary stamps on the deed. However, please keep in mind that everything is negotiable in a contract.
07. What does a closing agent do?
An agent gathers information from many sources to create the final Settlement Statement such as payoff information, tax information, deed preparation and commission amounts.
08. What happens after the closing?
The records will be searched again and then the new documents will be recorded to change title. Disbursement happens at closing.
09. Are there matters that wouldn't be revealed by a title search?
Yes, and these are commonly the issue of most title insurance claims.
10. How do I obtain title insurance?
Many companies and law firms sell real estate title insurance in connection with performing your real estate closing. You may purchase it through an attorney, a title insurance agency or a branch office of the title insurance underwriter itself. Be certain that the person you are working with is well-established, and will be around if you have a question about your closing or property in the future, and be sure that the underwriter used by your title agent is a large, financially sound insurer.
11. How does title insurance differ from other kinds of insurance?
A common distinction made is that most policies of insurance insure against some event that may happen in the future, such as an accident, illness or death. However, title insurance insures against events that happened in the past. Another difference is that you only pay a premium once.
12. How long does my coverage last?
For a one-time premium, that you pay on the date you purchase your property, your title insurance will remain in effect for as long as you own your property. In addition, your coverage may last even after you sell your property, for example, if you were to sell your property and the buyer sues you because of a title defect, your policy will still cover you for your legal expenses or losses up to the policy amount. For such a low premium, title insurance adds a great deal of security and peace of mind to property ownership. How much does it cost? In the State of Florida, the Department of Insurance has specified the minimum amount that may be charged for a title insurance policy. These the minimum promulgated rates were established to ensure the financial soundness of the title insurance underwriters, some of which in the past were charging premiums much too low to enable them to cover their client’s losses. A title agent or attorney may legally charge you more than the minimum promulgated rates, however, at Tri-County Land Title & Escrow it is our policy to always charge our clients the minimum promulgated rates.
13. What happens if the title search reveals "defects" in the title?
Nearly every property will have a "defect" of one kind or another. Most commonly, and generally not considered defects, are homeowners association documents, covenants and restrictions, and utility easements. These matters will be listed as "exceptions" to the title insurance policy, which means that the title insurer will not defend or indemnify the policy holder for litigation or claims relating to these matters. However, if there is a defect such as an unpaid mortgage, a lien or a judgment, such matters must be resolved before the closing can take place or the buyer does not have to close or the bank my refuse to loan money on the property. The responsibility for remedying the defects is on the seller.
14. What is "title"?
Title is another word for "ownership" in real estate. It is the owner's right to use and possess their property.
15. What is a "lender's policy"?
A lender’s policy protects the mortgage holder, if there is a title defect, the title insurer will defend the lender in any litigation that may result and will indemnify the lender in the event of a loss up to the original amount of the loan. What is a title search? A title search is an examination of the all of the transactions recorded in the public records which affect a property. These will include deeds, mortgages, liens, easements, covenants and restrictions, and other documents recorded in the public records. In addition, there will be an examination of the survey, taxes, special assessments and condominium and homeowners association fees. The purpose of the search is to discover any matters that could affect the value of the property or subject the property owner or lender to litigation.
16. What is an "Endorsement?"
An endorsement is an additional insurance policy to cover a particular kind of loss. In Florida, most lenders require a Form 8.1 Endorsement, a Form 9 Endorsement. What is an Owner's Policy A homeowner’s policy protects the purchaser against a loss that may occur from a title defect in your property. If there is a title defect, the title insurer will defend the lender in any litigation that may result and will indemnify the lender in the event of a loss up to the original amount of the loan.
17. What is title insurance?
Title insurance is an insurance policy issued by a title insurance company to the buyer of real estate and his or her lender. For a one-time premium paid on the date of closing, it agrees to defend the title of the property and to reimburse the owner or lender for any loss suffered up to the policy limits because of any undiscovered defects in the title to the property.
18. Why Do I Need Title Insurance?
Because land is permanent and can have many owners over many years, it is crucial that ownership is clear and free of outstanding claims. There are a thousand different things that could hinder your investment - errors in the public record, mistakes in examination, false affidavits, secret marriages, undisclosed heirs, etc. - but the only one way to protect and eliminate risk is Title Insurance. Title insurance plays a major role in making certain home ownership is safe and secure for as long as you own your home. It also helps close the deal smoothly. Experienced title experts, such as Tri-County Land Title & Escrow Co., have research capabilities that can determine the condition of a title quickly, thus allowing a prompt commitment to insure you against claims of ownership. Upon receiving a timely title insurance commitment, your lender can be assured that any title issues or defects will be addressed thus facilitating the mortgage approval process.
19. What Kind Of Policies Do I Need?
There are two different types of policies - a loan policy protects the mortgage company's interest in the property as security for the outstanding balance of the buyer's mortgage (this is why all loans require title insurance). The owner's policy safeguards the buyer's investment or equity in the property up to the face amount of the policy. And thanks to Tri County Land Title & Escrow Co.'s financially prudent simultaneous issue program, you can purchase both policies at the same time and enjoy substantial savings.
20. How Much Does Title Insurance Cost?
Title insurance offers so much for so little. Charges vary in different regions of the country, but generally cost about one percent (1%) or less of the value of the property. Unlike other insurance premiums, title insurance is paid one time only, and is included in your settlement closing costs.
21. What is a 1031 exchange?
By implementing a properly structured exchange, IRC 1031, allows an investor to sell a property, reinvest the proceeds in a new property, and to defer all capital gain taxes. "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment." To understand the powerful protection an exchange offers, consider the following example: An investor has a $200,000 capital gain and incurs a tax liability of approximately $70,000 in combined taxes (depreciation recapture, federal and state capital gain taxes) when the property is sold. Only $130,000 remains to reinvest in another property. Assuming a 25% down payment and a 75% loan-to-value ratio, the seller would only be able to purchase a $520,000 new property. If the same investor chose to exchange, however, he or she would be able to reinvest the entire $200,000 of equity in the purchase of $800,000 in real estate, assuming the same down payment and loan-to-value ratios. As the above example demonstrates, exchanges protect investors from capital gain taxes as well as facilitating significant portfolio growth and increased return on investment. In order to access the full potential of these benefits, it is crucial to have a comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term like-kind - often mistakenly thought to mean the same exact types of property - can reveal possibilities that might have been dismissed or overlooked. Utilizing a knowledgeable Title Company and Law Firm will ensure compliance with a 1031 exchange process.
22. What is Like-Kind Property?
A like-kind exchange, when properly executed, represents a way to postpone the recognition (taxation) of gain essentially by shifting the basis of old property to new property. If, in addition to giving up like-kind property, you pay money in a like-kind exchange, you still have no recognized gain or loss. The basis of the property received is the basis of the property given up, increased by the money paid. There are several rules and restrictions that must be strictly adhered to in order for a successful exchange to take place. Deferred exchanges will be treated as a sale rather than an exchange to the extent that the taxpayer actually or constructively receives money or other (not like kind) property in exchange for the like-kind property given up. Contrary to the commonly held misconception that exchanged properties must be of the exact same type - for example, that bare land be exchanged for bare land or an income property be exchanged for another income property - the actual definition of like-kind is far more empowering in its flexibility.