The Benefit of Having a Real Estate Attorney Involved in the Closing Process

By: Ashley Hobson, Esq. Picture1

Buying or selling a home can be both a stressful and exciting time. Many individuals may have no idea what to expect as they are entering into this process for the first time. The closing process can be confusing or overwhelming since there are many moving parts and documents with unfamiliar legal terms and conditions.

Sapphire Title has attorneys on staff to oversee the entire closing process and handle whatever legal issues may arise during your transaction, many times without any additional fees. Having an attorney review title searches, lien searches, surveys and closing disclosures eliminates much of the risk for items being missed or overlooked. If an issue does arise, whether it be with a party to the transaction or on the title and lien searches, it can be resolved on site and monitored closely by our team. An additional benefit to having attorney oversight is that issues can be resolved through dispute resolution, mediation, or court action if necessary. Attorneys can handle legal matters through avenues that other individuals do not have access to. The ability to simultaneously resolve legal issues and clear title in order to close on time or with as little delay as possible is a huge benefit to agents and their clients.

Many agents admit that they are not equipped to handle legal matters or settle any disputes that can arise and come to us for assistance in resolving issues for their clients. We strive to be a positive and reliable resource for our Real Estate Agent clients- this is a professional relationship that we value. Individuals sometimes find that they have to deal with an unforeseen issue prior to closing.

While the closing process can be intimidating- it doesn’t have to be. You quite literally place all of your trust in your selected title company. With our trusted closing team and attorney oversight, we are happy to be your guide through this time.

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FAQs

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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.