The the process of closing on your real estate purchase can be confusing, especially if you’re a first time home buyer. We’ve put together some of the most commonly asked questions surrounding settlement, to help make sense of the closing process.
Do I need to purchase title insurance? Lenders typically require that you purchase Lender’s Title Insurance, to protect the financial institution’s interest in providing you a home loan. Owner’s Title Insurance is highly recommended, as it protects your financial investment in the property you intend to purchase. Learn more about both types from our title insurance page.
How long does the settlement process take? The entire settlement process depends largely on the type of mortgage, but the average time to close is 30 to 45 days.
Will seller concessions include my title fees? Yes. Title fees typically include items like title search and the Lender’s Title Insurance premium. Costs like these are covered in transactions where sellers contribute to closing costs on behalf of the buyer.
What do I need to bring to the closing table? You’ll need to present your driver’s license or other government-issued ID. Depending on the lender, two forms of identification may be required. You’ll also need to bring a Cashier’s or Certified Check for the amount of your closing costs.
Have other questions? Here at Linear Title & Escrow, we work closely with lenders and agents to make the closing process as simple, streamlined and seamless as possible. For more information on title and escrow, contact our friendly team at (757) 340-0340 today!
Our last post discussed closing cost breakdown on the buyer’s side of a real estate sale. But what closing costs can you expect when selling a home? The seller’s side of the Closing Disclosure form typically has fewer line items than that of the buyer, but the costs vary based on a number of factors.
The two portions of seller’s closing cost having the most impact on the bottom line are the agent(s) sales commission and mortgage payoff balance. Though paid at closing out of the proceeds from selling your home, we’ll leave these aside when discussing fees associated with seller’s closing costs. Total seller’s closing costs typically average between six and 10 percent of the sale price, as reported by Realtor.com.
Understanding Seller’s Closing Costs
Here’s a breakdown of typical closing costs incurred when selling a property:
- Loan Payoff Fee: Covers the cost of forwarding the loan payoff to the lender.
- Lien or Judgment Releases: Settles any liens or judgments against the home.
- Termite Letter: Covers the cost of a termite inspection. A termite inspection and letter are generally conducted and submitted prior to closing.
- Home Warranty: The purchase of a service plan that covers the cost of repairing or replacing major systems and appliances in the home you are selling in the event breakdowns, damage or loss occurs. (This coverage typically lasts for one year after closing.)
- Home Repairs: Often appear in the form of a credit to the buyer to cover the cost of any necessary (pre-negotiated) home repairs.
- Homeowner Association Fees – Prorated based on the amount owed at closing. (If paid in full or through a date beyond closing, these amounts are prorated back to the seller and paid by the buyer.)
- Condo/Co-op Fees: Also prorated based on the amount owed at closing. Like HOA fees, any amounts paid for in advance for time beyond the closing date are prorated back to the seller and paid by the buyer.
- Property Taxes: This amount is prorated based on the percentage of the year the seller owned the property.
- Deed Preparation Fee: Applies to the document composed to transfer title on the property from the seller to the buyer.
- Storm Water Fee: Varies per city, and is charged to cover the cost of treating, storing and managing storm water runoff within the community.
- Grantor’s Tax: Transfer tax paid to the state, which covers the cost of conveying the property from the seller to the buyer.
- Notary Fee: Fee charged to verify signatures on closing documents. This typically applies if the seller is not local to where the transaction occurs.
- Settlement Fee: Paid to the company or attorney conducting the closing and covers the cost of preparing documents and executing the transaction.
- Seller Concessions: Paid by the seller on behalf of the buyer to cover the cost of certain closing fees. These amounts or items are negotiated prior to closing.
*These fees may vary based on state, city and county, and per mortgage product. Some may not be applicable, depending on the circumstances surrounding your closing.
Learn more about closing costs and the settlement process by contacting our friendly, knowledgeable team today! Call Linear Title & Escrow at (757) 340-0340 for additional information.