What is Title?
Title is the legal ownership to a piece of property. Title is also considered evidence of possession of a property.
What is escrow?
Simply put, escrow is a deposit of funds in an account held by a third-party to a transaction. Title companies or attorney offices are the major escrow account third-parties used in real estate transactions. All funds are deposited in escrow at a title company and then dispersed according to the escrow instructions. In a real estate sale, the escrow instructions are the HUD Settlement Statement or the Closing Disclosure Statement.
What are Recording Fees?
Recording Fees are county fees and taxes that are required on every sale. When a real estate property is sold, a Deed needs to be recorded. When a buyer purchases a property using a mortgage, then recording fees and taxes are also due to the county. Both the recording fees and taxes must be collected by Sapphire Title Company and then paid directly to the county.
What are E-Recording Fees?
E-Recording is shorthand for Electronic Recording. About 20 years ago, every title company needed to mail in the original deed to the county where the property lies for recording. The county would then mail it back to the title company, who would then forward the original “stamped” recorded deed to the owner. Since the technology boom, counties have become more tech-savvy and have allowed for e-recording. E-recording typically costs $5 per document to be recorded. The $5 fee is convenient to both sellers and buyers in the real estate sale because it cuts down the costs and time to mail the documents back and forth from the county. A typical turn-around time for a “manual” or “mailed” recording ranges from 7 to 14 days. E-recording typically allows for the county to record within 24-72 hours.
Example Breakdown of Fees:
Recording fees are based off the number of pages in the recordable document. A special warranty deed is typically 2 or 3 pages and generally costs about $27.00 to record. The taxes (known as documentary state taxes) on the Deed are based off the amount the property was sold for. So, if the property was sold for $100,000.00, the taxes would be $700.00. Taxes are determined by rounding up the sales price to the nearest hundred and multiplying that amount by $0.007 (or $7 for every $100). The same formula is used for mortgages. Typically mortgages range from 18-26 pages or about $150.00 to $225.00 to record. If the mortgage is for $100,000, the documentary stamp taxes would also be $700.00. One difference between mortgage and deed recordings is an additional tax known as intangible taxes. Intangible taxes are collected on every mortgage recording except credit union lender mortgagees or other exempt lender banks. Intangible taxes are determined by rounding up the loan dollar amount to the nearest hundred and multiplying that amount by $0.002 (or $2 for every $100).
The combination of the deed recording fees, the deed’s taxes, the mortgage’s recording fees, the mortgage’s documentary taxes, the mortgage’s intangible taxes (if not exempt), and the e-recording fees total the recording fees.
What are Intangible Taxes? What are Transfer Taxes?
Intangible taxes are imposed by the State of Florida on obligations for payment of money which are secured by mortgages or other liens, as defined by §199.133 Fla. Stat. It is a nonrecurring tax on the note or debt instrument.
Transfer taxes are commonly referred to as documentary stamp taxes in Florida. These are imposed by states, counties, and cities on the title of real property from one person to another within that jurisdiction. Transfer taxes are often confusing to first time homebuyers because they are a combination of a few taxes.
Why do I need a Survey?
Surveys are always suggested and are used to determine if there are any encroachments on the property you own or wish to purchase. A survey details the structures (otherwise known as the improvements) and the boundaries of the property. Generally, on real estate sales involving a lender, the lender will require the Alta Form 9 insurance endorsement. If the lender requires the title company to issue this endorsement, then a survey will be required. Note, however, in most cases, a survey is good for 7-10 years and can be recertified and is often a much less expensive option than ordering a new survey, which can add between $300 and $500 to your closing costs.