Florida Residential Title Closings
Florida has an extremely active real estate market. Residential properties change hands constantly. In all likelihood, you have been involved in such a sale yourself.
Yet the residential title closing process, which progresses through a number of steps, often seems mysterious to buyers and sellers alike, with each confused about such matters as when, why, and how closing costs are assessed. Here, then, is a step-by-step guide to how a typical Florida residential closing proceeds from start to finish.
What Are Florida Residential Closings?
A Florida real estate closing, in brief, is the conclusion of a real estate purchase/sale. The seller signs the conveyance deed and many other documents produced by your Florida title insurance company – True Title – and by the lender. The buyer signs documents like mortgage notes, loan disclosures, and other documents as well. This is necessary for the seller to receive his/her money. The Contract for Sale and Purchase will determine who pays for the title fees, closing fees, and title insurance. True Title must closely examine the purchase/sale contract because the party who pays for the title fees, closing fees, and title insurance varies from county to county – and sometimes within the same county – in the state of Florida.
That does not mean, however, that all of the paperwork is done. True Title must record all of the necessary documents (deeds, mortgages, affidavits, releases, satisfactions, etc.) with the recorder’s office in the county where the property is located. When this has been accomplished, the recorded documents are delivered to the buyer along with the owner’s title insurance policy. If a Florida title mortgage loan is involved, the lender receives the Loan title insurance policy and a recorded copy of the mortgage, among other documents recorded along with the mortgage and the title transfer papers.
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Florida Residential Closings: The Process Step-by-Step
Now let us delve into the details of the residential title closing process. The process proceeds as follows from start to finish:
Having decided on a property, the prospective buyer makes an offer to buy. This entails depositing earnest money that is held by True Title as your Florida title insurance company/escrow agent.
The buyer then obtains a home loan. In other words, he or she finds a lender willing to loan money to cover the cost of the sale and applies for a residential mortgage. Generally speaking, contracts are contingent on the buyer obtaining financing for the purchase.
Next, the property is appraised to determine its value. A licensed appraiser chosen by the buyer’s lender performs this task.
Title Search and Title Insurance in Florida Residential Closings
Your Florida title insurance company – True Title – then performs a title search of the official public records in the Florida County where the property is situated. The purpose of the title search is to find any and all records relevant to title (ownership), and claims and encumbrances affecting the property.
Ideally, the title search will establish that there are no liens or other claims on the property and the seller owns it free and clear. Should that not prove to be the case, the seller, and True Title work together to cure any title defects.
Your Florida title insurance company – True Title – then provides a title insurance commitment for that particular Florida property title. If the seller holds clear title to the residential property, good. If not, True Title details any and all claims and/or encumbrances affecting title to the property and explains on the Commitment any special requirements for the issuance of the prospective Owner’s title insurance policy.
Next, professional inspectors examine the property for pests including, but not limited to, termites, which are a constant threat in Florida’s tropical environment. The buyer also arranges for a home inspection to check the adequacy of the roof, the structure, the appliances, and other such features to make sure the real property is fit for its intended use. Even if the property is being sold as-is, such an inspection is still necessary so the buyer will know what sort of repairs he or she must undertake.
Additionally, a real estate surveyor will ensure that the boundaries of the property are as defined in the residential property description and does not conflict with anything on the title documentation. This step guarantees there is access to the property from the roadway, and it determines if any encroachments may detract from the value and/or use of the property.
The buyer must then address the potential need for hazard, wind, and flood insurance. In Florida, lenders may require such insurance. This depends on the zone location of the property as designated by the Federal Emergency Management Agency (FEMA).
Additionally, the buyer will perform a pre-closing walk-through inspection of the property being purchased. The inspection ensures that all contractually agreed-upon repairs were in fact performed and that any other potential impediments to closing the sale have been resolved.
Finally, it is time for preparation and review of the closing documents provided by True Title and the lender. The best practice is to prepare and distribute all documents for review in advance of the actual closing [meeting of the seller, seller’s agent(s), buyer, buyer’s agent(s), Florida title insurance company – True Title, and loan originator/lender representative]. This allows any errors or disagreements to be discovered and resolved beforehand, which generally facilitates the title closing process.
With all of this accomplished, the lender gives approval to close the loan transaction and thus authorizes the buyer to conclude the sale. Then the earnest money, any additional buyer deposits, and the mortgage loan funds are transferred from True Title to the seller, and any existing mortgages/liens/judgments encumbering the property are paid off and satisfied/released in the official public records. The Warranty Deed (or other instrument of conveyance) and the mortgage, along with other necessary title documents depending upon the nature of the particular Florida title transaction, are recorded in the official public records in the county where the property is located.
The title professionals at True Title are waiting for your call so they can help you navigate through the Florida residential closing process. Call now to get started with the Florida title transfer process – (877) 785-8792.