Buying a new home is more than the number of bedrooms and architectural style. This is a significant investment. Therefore, you should do the necessary due diligence. Part of Florida’s real estate buying process requires title and escrow services. But what exactly are these services, and how do they help you when purchasing real estate in Florida?
What Is Included With Title Services?
When you purchase real estate, you want to know that the person you are buying it from has the legal right to do so. This means confirming who they are and that they are the rightful owner of the property. Title services do the required research to answer these questions for you.
Research Title History
Because the primary purpose is title research, there are several tasks involved in title services. For example, they will begin by verifying the seller’s identity and that they have the right to sell the property. Then, with the property owner’s permission, they will order a property survey. This confirms that the property that is for sale matches the legal description of the property.
The next step is to research the ownership history of the property. This includes requesting documents to verify that all property taxes are paid and up to date. In addition, documentation from the IRS that there are no outstanding taxes or liens on the property. Order a municipal lien search from the city to ensure nothing impeded the property’s sale. Finally, any lenders, lien holders, and judgment creditors are requested to provide documentation that the outstanding debt is satisfied.
Facilitate Closing Process
Title services continue during the closing process. The title services will coordinate the closing by communicating with all of the parties to ensure everyone is ready and on the same page. They obtain the loan documents from the lender. In addition, escrow services collect all outstanding premiums, fees, and commissions. This allows for the proper disbursement during closing. If necessary, outstanding existing mortgages, judgments, and liens are paid. Several documents are required that the escrow several will complete. This includes the Closing Disclosures, ALTA Settlement Statement, deed, and any other documents required by federal and state law.
Initiate Title Insurance
Once the title search is completed, the next step in title services is to issue title insurance to the mortgage company and buyer. The mortgage company requires an insurance policy because it wants to protect the investment of issuing a large loan to the buyer. The buyer needs an insurance policy because they are borrowing a large amount of money. This protects the buyer from hidden risks, unexpected claims, or fraud. All these things could cause the buyer to risk losing the property while still being on the hook for the loan. Should something arise, both insurance policies with provide coverage for the title defect and legal costs.
What Is Included With Escrow Services?
An escrow is an account that holds the money that will exchange hands during the sale of real estate. Escrow services manage this account and the monies in it. This protects the seller, buyer, and lender. Often an escrow service will collect and hold the associated documents. Then, as a part of the closing process, the escrow company will collect, manage, and redistribute the money associated with the purchase.
Plan Your Home Purchase
If you plan to purchase real estate, take the necessary steps to protect yourself by securing title and escrow services. A home purchase is one of the most significant investments you can make, so do not risk your financial future by not doing the necessary research. While a title service cannot guarantee that a piece of real estate is perfect, it can significantly reduce the risks. Likewise, if you plan to secure a mortgage, your lender will require you to take these precautions.
Schedule a consultation with our experienced team of attorneys to discuss title and escrow services.
