FAQs

Upon receipt of the signed sales contract, the first step is to perform a title search for the property. Our abstractor’s conduct a search of the land, judgment and other official records of the county in which the property is located, and generate a comprehensive report outlining what the search uncovers.

A title must be deemed “good and marketable” before the settlement process can continue. The results of the title search identify (among other things): the current owner of the property; any liens on it; and any limits on how an owner can use the property. Our attorneys will examine the title search report to determine what—if anything—must be done in order to clear the title to the property so that the buyer can obtain its (and its lender’s) goal of a “good and marketable” title.

A location drawing or survey is a physical drawing done by a surveyor hired to complete this task. Depending upon the type of survey required, it may show: legal boundaries; location(s) and size(s) of any buildings on the property; set-back lines; easements; and other restrictions and information. It is advisable to determine whether a prior survey exists. A recertification of a prior survey is less costly than a new survey.

Whether or not you get a survey on your property depends on the type of property you are purchasing. If you are purchasing a condominium, a survey is not required. If you are purchasing a townhouse or single family home, most lenders will require a survey. Surveys are generally not required for refinances. For transactions involving commercial property, an ALTA survey will often be required. These projects can be very costly. Again, if a prior survey exists, this can cut your costs.

Most lenders require a location drawing of the property in order to ascertain that: others (such as adjoining property owners) have not encroached on the property being purchased; improvements on the property neither extend beyond the lot’s legal boundaries nor are placed over easements of record; and there are no violations of building restriction lines or other regulatory restrictions.

Our attorneys will review the completed drawings, and if any problems are found, Action Title Services  will work with all of the parties involved to find an acceptable solution that allows the closing to move forward.

Title insurance protects against a loss to the lender or the owner in the event that the title to the property is other than as insured. Title insurance is an essential part of virtually every transfer of ownership of residential or commercial real estate. It is purchased at settlement, and the title insurance policies are issued shortly thereafter. Although it can be one of the higher costs of closing, buyers should be aware that it protects them against potentially disastrous losses. There are two (2) types of title insurance policies: lender’s and owner’s. Lender’s title insurance is required by lenders to protect their interest in the property from possible title defects. Buyers have the option of purchasing owner’s title insurance to protect the buyer’s investment, which often is greater than the loan on the property. While the lender’s policy expires when the loan is paid off, the owner’s policy continues as long as the owner has a vested interest in the property. It is important to realize that title insurance premiums are paid only once, at the closing. Owners title insurance cannot be purchased after the closing except in connection with another transfer or a full title search concerning the property.

The concept of title insurance is generally misunderstood. Unlike most insurance which protects against the risk of future events, title insurance exists to eliminate losses due to defects in title which occur as a result of things that happened in the past.

Even the most careful title search will not reveal some situations or events that could cast doubt on your title to the property. Title insurance policies generally cover losses for mistakes made in researching, abstracting and examining the title as well as losses caused by items that cannot be discovered by examination of the public records, such as: mistakes in the public record; fraud or forged title instruments; undisclosed heirs; adverse possession and other undisclosed prescriptive rights, etc. A title insurance policy will financially protect the insured party by paying its legal defense fees and monetary claims, should unexpected items that are not of record arise.

Specific premium costs for a policy are easily calculated upon request. In addition to the title insurance premium, a fee for preparation of the title insurance commitment/binder is a line item that will appear on the settlement statement.

At the settlement, our settlement officer “closes” the transaction by explaining each of the closing documents and ensuring that the buyer and seller sign each where required. The settlement officer also prepares and reviews with the parties a settlement statement which shows how all of the settlement funds are to be handled. Whenever possible, parties to the transaction are provided a draft copy of the HUD-1 form in advance of closing for their review. Once the parties approve the figures on the settlement statement, the settlement officer collects the buyer’s and seller’s shares of the closing costs (the division of such costs being agreed to in advance). Closing costs may include property taxes, state and local taxes on land sales (recordation taxes and transfer taxes), lender and broker fees, real estate commissions, municipal charges, bills for pest inspections and surveys, the buyer’s homeowner insurance premium, lenders’ and owners’ title insurance premiums, title company charges, and any other invoices or items to be paid or adjusted at closing. Funds are often held in escrow by 1st State Title to respond to various items or circumstances agreed to in advance by the parties.

All parties must bring an unexpired government issued photo identification such as a driver’s license or passport to the closing, since Action Title Service is required to verify the identity of all parties. Social Security cards are also required by certain lenders. If you are a seller and a non-resident alien (i.e., a Foreign Person as that term is used under the IRS regulations), please immediately alert Action Title Service to this fact and also expect to have a portion of the sales proceeds withheld at closing. If you are subject to withholding and you fail to so alert us, this could delay the closing. For sellers, nothing else is required unless you choose to have your proceeds wired into your bank account—in which case you will need to bring specific wiring instructions for the account to which the funds will be transmitted. This is most easily accomplished through a voided check or deposit slip on that account. Homeowners who are refinancing and taking cash out and wish to have the funds wired should similarly bring wiring instructions, a voided check or deposit slip to closing.

​

Buyers must bring sufficient certified funds to pay the down payment called for in the sales contract. This is usually done by a cashier’s or certified check. If the buyer has brought more than the amount required to the closing, Action Title Service will issue the buyer a check for the excess.

Buyers should also bring (if they haven’t provided Action Title Services, a title insurance agency has one already) a completed Choice of Tenancy Form. This form is provided to all buyers named in the sales contract shortly after we obtain a copy of the contract. It instructs us how title will be held and thus how the deed should be prepared.

Unless otherwise agreed, all buyers, sellers, and their respective real estate agents will attend the closing which is conducted by the Action Title Services, a title insurance agency settlement officer. Lender representatives and mortgage brokers are rarely in attendance.

A refinance closing takes approximately 30 minutes and the settlement of a sale / purchase lasts approximately one hour. If any complications arise, it could take longer.

If a seller cannot attend the closing, please notify Action Title Services, a title insurance agency as soon as possible, since a Power of Attorney will need to be prepared. This entails formally appointing someone such as a spouse or other relative or friend to sign all the documents on your behalf. This person will need to attend the closing in your place and bring proper identification with him or her.

If a buyer cannot attend the closing, a Power of Attorney might be permitted. However, any use of a Power of Attorney must first be approved by the lender and this is sometimes difficult and time consuming. If the use of a Power of Attorney is allowed, you will need to let Action Title Services, a title insurance agency know right away who will be attending settlement—and signing on your behalf—so that an appropriate Power of Attorney can be prepared and/or reviewed prior to the closing.