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Closing and Title Costs It's the big day.
The day you go to the title or escrow company, sign your name on the dotted line, hand over a check and prepare to take ownership of your new home.
It's also the day that you and the seller will pay "closing" or settlement costs, an accumulation of separate charges paid to different entities for the professional services associated with the buying and selling of real property.
It's too often a day filled with uncertainty and stress.
To help you better understand this confusing subject, the Land Title Association has answered some of the questions most commonly asked about title, closing and closing costs.
What services will I be paying for when I pay closing costs?
You will usually be paying for such things as real estate commissions, appraisal fees, loan fees, escrow charges, advance payments such as property taxes and homeowner's insurance, title insurance premiums, pest inspections and the like.
How much should I expect to pay in closing costs?
The amount you pay for closing costs will vary; however, when buying your home and obtaining a new loan, an estimate of your closing costs will be provided to you pursuant to the Real Estate Settlement Procedures Act after you submit your loan application. This disclosure provides you with a good faith estimate of what your closing costs will be in the real estate process. An itemized list of charges will be prepared when you close your transaction and take title to your new property.
Can I pay for my closing costs in installments?
No, and it is easy to understand why. Many different parties will have fulfilled their responsibilities and be awaiting payment upon closing. The title or escrow company will disburse money to those parties, pursuant to the escrow instructions, when funds are available.
Will I be allowed to write a personal check to cover my closing cost?
Your closing funds should be in the form of a cashier's check, issued by an institution from the state of your purchase, made payable to the title company or escrow office in the amount requested. A personal check may delay the closing or may be unacceptable to the title or escrow company. An out-of-state check could also cause a delay in your closing due to possible delays in clearing the check.
How much can I expect to pay for Title Insurance?
This point is often misunderstood. Although the title company or escrow office usually serves as a meeting ground for closing the sale, only a small percentage of total closing fees are actually for title insurance protection.
Your title insurance premium may actually amount to less than one percent of the purchase price of your home, and less than ten percent of your total closing costs. The title policy is good for as long as you and your heirs own the property with the payment of only one premium.
Why are separate owner's and lender's title insurance policies issued?
Both you and your lender will want the security offered by title insurance.
Your home is an important purchase, and you will want to be certain your home is yours, all yours. Title insurance companies insure your rights and interests in order to protect you against claims.
Your lender is looking to insure the enforceability of their lien on your property and marketability. What is meant by "marketability"? Local lenders will "originate" a loan here, and, often, sell it to an out-of-state investor. This investor, who may never see the property, needs to know that he has a valid and enforceable lien. Title insurance is the way of making certain. Without a current title policy, the loan is essentially unmarketable.
What does my Title dollar pay for?
Title insurers, unlike property or casualty insurance companies, operate under the theory of "risk elimination."
Risk elimination can only be accomplished after an intensive period of risk identification.
Title companies spend a high percentage of their operating revenue each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title "plant" or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property are posted to these plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval.
Trained title experts are able, with the aid of their extensive title plants, to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, you can seek to "clear" those encumbrances which you do not wish to assume.
The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible--we live in an imperfect world, where human error and changing legal interpretations make 100 percent risk elimination impossible. When claims do arise, title insurance companies have professional claims personnel to make sure that your property rights are protected pursuant to the terms of your policy.
To conclude, when you pay for your title insurance policy, you are paying for a team of professionals who have worked together to deliver you a title insurance policy which represents protection for your ownership of real property.
Who can I look for straight answers on Title, Closing, and closing costs?
Title or escrow company personnel are available to review and explain your title policy and your closing statement.
Article by CLTA
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Real Estate, Houses , Homes, Cottages, Lake Huron Waterfront Property, Waterfront Property on Inland Lakes,Land, Tawas, East Tawas, Tawas City, AuGres, Oscoda Michigan
TO SEARCH LISTINGS
GO to www.all-northern-michigan.com
WELCOME TO NORTHEASTERN LOWER MICHIGAN!
Best Choice Realty, Inc. means this sincerely and knows that once you visit NORTHEASTERN LOWER MICHIGAN you, too, will feel the same way we do about the abundance of nature and beauty to be found in NORTHEASTERN LOWER MICHIGAN!
Iosco County, Arenac County and Ogemaw County are just an hours drive north of Saginaw, but offer a full range of recreational activities for those seeking an escape from city life. The Huron National Forest offers excellent hunting and the AuSable River has great fishing. Near Hale, Sand Lake Heights and the surrounding areas there are hiking, snowmobile and cross country ski trails and many all sports lakes for swimming, water skiing and fishing. And, of course, Au Gres is on the shore of Saginaw Bay and Tawas, East Tawas and Oscoda are on the shores of Lake Huron. So come up to Iosco County, Arenac County and Ogemaw County, check out the real estate available here and enjoy life!
Best Choice Realty, Inc. maintains an outstanding reputation in the real estate profession and we can assure you that YOU and YOUR needs are our #1 priority. Our real estate office and associates are members of real estate multi-list services (RMLS) covering Iosco County, Arenac County, Ogemaw County and Alcona County.
Our high quality staff of professional Real Estate Consultants have been trained to make your real estate move go as smoothly as possible. Each real estate associate is kept up to date with the real estate market and the changes in the real estate industry by ongoing real estate training and informational meetings. We're proud to have real estate agents that go the " extra mile " to provide you with the utmost in professional real estate service. We are locally owned and staffed by individual real estate agents who have spent years living and working in this area. We know the area and we know the real estate market.
We are a full service real estate company offering sellers agency, buyers agency, broker price opinions and real estate consulting. We have residential, commercial, resort, lakefront, acreage, hunting land and recreational properties available. If you are considering a move, or just have a question concerning real estate, don't hesitate to contact us. We personally guarantee the highest level of professional service...
Sincerely,
Michael D. Fournier
President/Associate Broker
BUYERS: "LOYALTY PAYS OFF"
Some buyers like to leave their name with three or four sales people. Although it may seem to be to the buyer's advantage to have a number of real estate agents to work with, it is usually a very ineffective approach. The assumption is that many real estate agents will produce more results than working exclusively with one. THIS IS NOT TRUE! YOU NEED THE TOTAL COMMITMENT OF ONE REAL ESTATE AGENT. My advice to you is to find a Realtor whom you feel will get the results you need. Tell this real estate agent that you will work exclusively with him or her ( SIGNING A BUYERS AGENCY CONTRACT IS RECOMMENDED ) as long as you see the effort required to get the job done. In this way, you will have a dedicated real estate agent who will take on the personal responsibility of handling all the details of your home purchase.
REAL ESTATE AGENTS are paid on a straight commission basis. They don't receive a salary. They are not on an expense account. They don't get paid unless they SELL YOU SOMETHING. This is why working with more than one agent is not a good idea. None of the real estate agents know if their efforts will result in any income. If a agent knows that you will be loyal to them that is all the motivation needed to provide, a real estate agent, dedicated to getting the job done right.
PRICING YOUR HOME TO SELL
Get a comparative market analysis.
EXPIRED
Out of range. Up to 35% of all homes put on the market never sell. The prices at which these homes expired represent the overpriced range. IF YOU PRICE HERE, THEN YOUR LISTING WILL ALSO EXPIRE!
CURRENTLY FOR SALE
Represents the upper end of the market. These are asking prices only. They have not been attained in the real estate market. Examine the number of days on the market and if it has been a long time, the homes(s) is/are priced to high.
SOLDS: - TRUE MARKET VALUE.
NEVER SELECT A REAL ESTATE AGENT BASED ON THE PRICE THAT THEY TELL YOU!
A real estate agent has no control over the price the market will allow. SELECT YOUR REAL ESTATE AGENT FIRST based on competence of the real estate agent, company and services provided. Don't encourage or allow the real estate agents to " bid the price up", by telling you what they think you want to hear, to get the listing. True professional real estate agents will give you candid feed back and factual information, based on "SOLD PROPERTIES", so you can price within the "MARKET".
BENEFITS TO PROPER PRICING
1. FASTER SALE
2. LESS INCONVENIENCE
3. EXPOSURE TO MORE PROSPECTS
4. BETTER RESPONSE FROM ADVERTISING AND DRIVE BY CALLS
5. INCREASED SALESPERSON RESPONSE
6. ATTRACTS HIGHER OFFERS
7. MEANS MORE MONEY TO SELLERS
REASONS SELLERS USE WHEN OVERPRICING
1. WE'VE MADE IMPROVEMENTS: Improvements should be made for enjoyment, not for sale. You cannot add an item to a home, select it to your style, use it, then expect a buyer to pay the original cost.
2. WE NEED THE MONEY: An owners need for money does not increase the value of the home.
3. BUYING IN A HIGHER REAL ESTATE MARKET: Real estate values are location specific. High real estate values in the destination market/home do not increase the value of your existing home.
4. WE PAID THIS MUCH: Chances are you paid market value. It's not that the price was too high, but sometimes the market experiences subsequent changes. The real estate market is effected by interest rates, the economy and supply and demand.
PRINCIPLES OF VALUATION
1. COST - The amount actually paid for a property plus any capital improvements made since the purchase.... 2. PRICE - The stated amount an owner is willing to accept for a property.... 3. VALUE - The amount a single buyer is willing to pay given a certain set of circumstances.... 4. MARKET VALUE - The amount many buyers would pay a reasonable, willing, seller. It is based on the history of similar real estate recently sold in the area.
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