The content from this article came from Senior Loan Executive John Henricks, My Key Mortgage. I couldn’t find a way to share it easily, so I copied the article giving full credit to Mr. Henricks. This topic can perplex homebuyers, but this article explained it simply. I’ve worked with Mr. Henricks and he’s a skilled and knowledgeable loan executive.
The article:
You’re clear to close and you send your buyers the final paperwork. As they scroll through the documents, they ask you about title fees associated with closing. They’re already paying for title insurance and other fees on the house they’re selling and figured this is only a seller’s cost – so why are they paying again?
Title is the legal right to own and use a specific real estate property. When selling a home, title fees include:
– Title search fee: The examination of public records regarding the property and who the rightful owners are.
– Title settlement fee: Includes notary, deed prep, survey, and other administrative tasks.
– Title insurance: The title insurance protects the new owners (your buyers) against any claims or liens on the property that may have been missed. It does not cover the buyer’s lender.
Lender’s Title InsuranceIf your buyer is taking out a mortgage, the lender will require them to purchase a lender’s policy (also called a mortgagee’s policy). This will pay for the lender’s legal defense costs and reimburse any mortgage payments the buyer can’t make if they lose the house to someone else’s claim on it. No matter how complete a title search is, there is no guarantee an heir won’t turn up due to a misspelled name or buried paperwork, revealing a claim on the property.
A lender’s policy will defend these types of claims. Other buyer’s fees related to a lender’s title policy include a Settlement Fee, which is the cost to facilitate the closing, along with additional charges for third party title processing services.
For information about all closing costs to keep your clients in the know, reach out to me [John Henricks] and I will walk through the closing statement line by line.
End of content from Mr. Henricks