| |
What is a closing?
At closing, the parties to an Agreement of Sale perform their essential roles required by the agreement: Buyer pays Seller in exchange for Seller transferring real estate to Buyer. The term "closing" is also referred to as "settlement."
back to FAQ's | top of page
What is a settlement company?
Settlement companies provide closing services to Buyers and Sellers. Primarily, our job is to provide Title Insurance to Buyers and their Lenders. We act as an escrow agent. We explain all the loan paperwork to the Buyer. We organize the settlement statement, which shows Buyers how much money they need to bring to closing. From our escrow account, we pay all the bills listed on the settlement statement. "Settlement Companies" are also known as "Closing Companies" and "Title Companies."
back to FAQ's | top of page
What is Title Insurance?
Title Insurance protects Buyers in the event a claim is ever made that a previous property owner had an unpaid financial obligation. Examples include unpaid property taxes, judgments, liens, and Mortgages. Legally, without Title Insurance, Buyers would be responsible for a previous owner's unpaid obligation. For a first Mortgage, every Lender requires that you purchase Title Insurance not only for yourself, but for them as well. The Pennsylvania Title Insurance Ratings Bureau regulates title Insurance rates. No matter what settlement company you work with, the rates are the same. Your rate depends upon the amount of your purchase price - the more expensive the price, the higher your rate will become.
back to FAQ's | top of page
Do I need an attorney?
Yes, we encourage you to hire an attorney. There are many things that can go wrong during the home-buying process and your lawyer can help you avoid them. A couple hundred bucks to an attorney can save you thousands later.
back to FAQ's | top of page
Where did the hand money go?
If you are purchasing with the assistance real estate broker, the typical scenario is that the broker for the selling agent (the Buyer's real estate agent) is holding the hand money. At the closing, this appears as a credit toward the purchase price.
back to FAQ's | top of page
What is transfer tax?
Transfer tax is like a sales tax. Whenever Pennsylvanians transfer property, a 1% tax is paid to the state. There is an additional tax for the municipality and the school district. This amount of this additional tax varies from one municipality to the next. Typically, the transfer taxes are paid in equal halves by the Buyer and Seller.
back to FAQ's | top of page
Is my transaction transfer tax-exempt?
Here is a link to the Pennsylvania Department of Revenue that explains when properties transfers are exempt from transfer tax: http://www.revenue.state.pa.us/revenue/cwp/view.asp?A=15&Q=50683
back to FAQ's | top of page
What is a pro-ration?
In the interest of fairness, the property taxes for the current year are pro-rated at closing. In other words, if your Seller has paid the property taxes through the end of the year, you reimburse them at closing a pro-rated amount calculated from the closing date through the end of the year. Conversely, if the Seller has not yet paid their property tax, we collect their share of the tax from the beginning of the year until the closing date and give it to you as a reimbursement.
back to FAQ's | top of page
What is "fiscal" versus "calendar?"
These terms apply to the pro-ration of school taxes. Generally, "fiscal" means budgetary. In Southwestern Pennsylvania real estate circles, "fiscal" refers to the period of time starting July 1st and ending June 30th of the following year. Typically, school taxes are pro-rated on a "fiscal" basis, except for the Pittsburgh City Schools, which are pro-rated on a "calendar" basis. Get it?
back to FAQ's | top of page
How should the school taxes be pro-rated?
Outside the City of Pittsburgh, the school taxes should be pro-rated on a "fiscal basis," i.e. July 1 through June 30. The Realtors Association of Metropolitan Pittsburgh supports this method. It may be the law in Pennsylvania. It has become the custom in the closing business. This point is negotiable, however, we recommend that if you're negotiating figures, then you should re-negotiate your purchase price. In the City of Pittsburgh, school taxes are pro-rated on a calendar basis.
back to FAQ's | top of page
How do I get paid?
At the end of your closing, the attorney will give you a check representing your "net proceeds." In other words, whatever is left after your Mortgage payoffs, commissions, final water and sewage, transfer tax, and other administrative fees plus (or minus) tax pro-rations.
back to FAQ's | top of page
What kind of check am I going to receive?
At the closing, you will receive a check from our escrow account. This is not a cashier's check and it is not a certified check, either. After you deposit it, it may take more than one day to clear your bank. If you need this check to take to another closing (for example, if you're leaving our closing to go purchase a house), make sure that the other settlement company will accept our escrow check in lieu of certified funds or a cashier's check.
back to FAQ's | top of page
What is my payoff?
At closing, we collect the amount to pay your Mortgage in full. This is called your "payoff." Typically, people are surprised to see that their payoff amount is greater than what they were expecting. That's because when you called your Mortgage Lender, they told you the principal balance but they left out the daily interest that adds to the principal balance.
back to FAQ's | top of page
Who will prepare the new deed?
For $100.00, we will prepare the deed that conveys your ownership interest to your Buyer. If you have your old deed, please fax it to us because it will help us get started on preparing the new deed.
back to FAQ's | top of page
Why is there an overnight courier fee?
As you know, interest is adding to your payoff on a daily basis. By sending your payoff via overnight courier, we can be sure that your payoff is delivered and we can prevent unnecessary interest from accumulating. Our overnight mail fee is $13.50.
back to FAQ's | top of page
How is my payoff obtained?
Initially, we will ask you for information about your Mortgage, including your account number and social security number. Then we will attempt to obtain payoff information from your Mortgage Lender. If the Lender refuses to provide us with the information, we will contact you for a written authorization. At closing, we will deduct your Mortgage payoff from your sale proceeds and send your payoff via overnight courier (ex., Airborne Express, FedEx).
back to FAQ's | top of page
What do I need to bring to the closing?
1).Your driver's license.
2).Any keys or other means for your Buyer to gain entry into the house.
back to FAQ's | top of page
How is my Mortgage satisfied on the public record?
After your Mortgage loan is paid in full, your Lender will stamp "paid-in-full" on your original note and Mortgage. They will send the note directly to you. If they send the Mortgage to you, then forward it to us. Once we receive the Mortgage, we will deliver it to the county Office of Recorder of Deeds, who will indicate on the public record that your Mortgage has been satisfied.
back to FAQ's | top of page
How are my final water/sewage/garbage bills paid?
At the Closing, we collect a figure that we estimate to be enough to pay any final water and/or sewage bills. If you receive a water and/or sewage bill after the Closing, be sure to send it to us immediately. Upon receipt, we will pay the final bill and refund any excess funds back to you.
back to FAQ's | top of page
What if I get a tax bill after the closing?
Send it to your Buyer immediately.
back to FAQ's | top of page
What if my Mortgage payments are automatically deducted?
You must call your Mortgage Lender immediately and request that they cease the automatic deduction.
back to FAQ's | top of page
What about my homeowner's insurance?
Call your homeowner's insurance agent immediately after the closing and request that they cease coverage. Ask your Agent if you are entitled to a refund of a portion of your premium.
back to FAQ's | top of page
What happens to my escrow account?
Most Lenders will refund the balance of your escrow account within three weeks from the date the payoff is received. In rare circumstances, Lenders apply the escrow balance to your payoff, thereby reducing your payoff figure.
back to FAQ's | top of page
Should I get a survey?
Absolutely. Even if the Seller has a relatively recent survey, it is imperative that you have a drawing of the property as it exists today. This way, you'll know whether that pond out back is actually yours, or whether your neighbor's fence crosses over the boundary line onto your property. For more information, click here:
back to FAQ's | top of page
Can I write you a personal check?
No! In Pennsylvania, Buyers are required to bring "readily available" funds to closing. In other words, your funds must be immediately convertible into cash. You must bring a cahier's check, certified check or money order. Make yourself the payee, as it is the safest way to carry large sums of money. At closing, you'll endorse the check and sign it over to the settlement company and we'll deposit the check into our escrow account. If you just sold property immediately before coming to your purchase closing an escrow check from a reputable settlement company may be acceptable. Please check with us first.
back to FAQ's | top of page
Who will explain my Mortgage paperwork?
We will! If you are one of "those people" who need to read paperwork thoroughly and/or ahead of time, be sure to let us know. Whenever possible, we'll deliver the paperwork to you early, so there are no surprises at closing.
back to FAQ's | top of page
How much money do I need to bring to closing?
We'll give you your "final figure," as soon as your Lender provides us with their final figures. Oftentimes, this is several days before closing. However, it is not uncommon that your numbers are not ready until minutes before your closing begins. In that case, bring a certified check for the amount your realtor and/or loan originator estimated. Be sure to bring your personal checkbook to make up the difference, if any.
back to FAQ's | top of page
When can I move in?
Unless you and your Seller have a different agreement, you do not own the property until your closing is over. Once the closing is finished, the Seller will give you the keys to the property and you can move in. If you need to move in before the closing, discuss it with your realtor well ahead of time, because this will require special considerations.
back to FAQ's | top of page
Do I need a realtor?
A million things can go wrong. Experienced realtors can prevent many problems. Pennsylvania law requires that realtors guide you through the entire home buying process.
back to FAQ's | top of page
What is an Escrow Account?
Escrow account means "somebody else's money." The funds for your loan are deposited into our escrow account. We deposit your check into our escrow account. After the closing, we pay, or "disburse," all the items from the settlement statement from the escrow account. It is a non-interest bearing account. Your Lender may also have an escrow account for you. If your Lender has an escrow account, then each month, your payment will include 1/12 of the property taxes and homeowners insurance. This 1/12 is deposited into your escrow account. Each year, as the property taxes and your homeowner's insurance bills are due, the Lender will pay them from the escrow account you have with them.
back to FAQ's | top of page
Am I entitled to a discount on the Title Insurance?
Perhaps. Find out when your Seller purchased the property. If this has occurred within the last ten years, ask the Seller for their title policy. You may be entitled to the reissue rate, which is a slight deduction from the basic rate found on the table. If your Seller purchased the property within the last three years, you may be entitled to the substitution rate, which is a more significant deduction. It is your responsibility to obtain this information and provide it to us before the closing. We will never ask you for it.
back to FAQ's | top of page
When will I get my Deed and Title Insurance policy?
After the closing, we will send the Deed to the county Office of the Recorder of Deeds. When the Deed is returned to our office, we use the recording information to complete the Title Insurance Policies. After the Title Insurance Policies are completed, we will mail the original Deed and Owner's Policy of Title Insurance to you. The time frame generally depends on how quickly the Office of the Recorder of Deeds returns the recorded Deed back to our office.
back to FAQ's | top of page
What about homeowner's insurance?
Every Lender requires that you obtain a policy of homeowner's insurance that includes their name as the loss payee. For example, if your house burns down (heaven forbid), the policy would first payoff your loan and then you will receive a payment for any additional coverage you have under the policy. You must provide us with your declarations page as soon as possible before your closing. Let us know whether you've already paid your first year's premium or whether you would like us to collect it from you at the closing.
back to FAQ's | top of page
What do I need to bring to my closing?
1). Bring your driver's license or some other form of identification. The closing officer will need to prove your identity so he/she can notarize your signatures on many of the documents.
2). If you haven't met all the Lender's conditions, bring any additional documentation they require.
3). If you haven't already provided proof of homeowner's insurance, bring your declarations page. Be sure to let us know whether you've already paid your first year's premium.
4). Don't forget the check for your funds needed to close, if any!
back to FAQ's | top of page
Who will explain my Mortgage paperwork?
We will! If you are one of "those people" who need to read paperwork thoroughly and/or ahead of time, be sure to let us know. Whenever possible, we'll deliver the paperwork to you early, so there are no surprises at closing.
back to FAQ's | top of page
What is an Escrow Account?
Escrow account means "somebody else's money." The funds for your loan are deposited into our escrow account. We deposit your check into our escrow account. After the closing, we pay, or "disburse," all the items from the settlement statement from the escrow account. It is a non-interest bearing account. Your Lender may also have an escrow account for you. If your Lender has an escrow account, then each month, your payment will include 1/12 of the property taxes and homeowners insurance. This 1/12 is deposited into your escrow account. Each year, as the property taxes and your homeowner's insurance bills are due, the Lender will pay them from the escrow account you have with them.
back to FAQ's | top of page
Am I entitled to a discount on the Title Insurance?
Perhaps. If you purchased the property within the last ten years or if you refinanced recently, you may receive a discount. You must also have your Title Insurance Policy. It is your responsibility to obtain this information and provide it to us before the closing. We will never ask you for it.
back to FAQ's | top of page
How do I get paid?
If the purpose of your refinance is to obtain cash, then we will send the check to you after your rescission period expires.
back to FAQ's | top of page
What kind of check am I going to receive?
You will receive a check from our escrow account. This is not a cashier's check and it is not a certified check, either. After you deposit it, it may take more than one day to clear your bank.
back to FAQ's | top of page
What is my payoff?
At closing, we collect the amount to pay your Mortgage in full. This is called your "payoff." Typically, people are surprised to see that their payoff amount is greater than what they were expecting. That's because when you called your Mortgage Lender, they told you the principal balance but they left out the daily interest that adds to the principal balance.
back to FAQ's | top of page
Why is there an overnight courier fee?
As you know, interest is adding to your payoff on a daily basis. By sending your payoff via overnight courier, we can be sure that your payoff is delivered and we can prevent unnecessary interest from accumulating. Our overnight mail fee is $13.50.
back to FAQ's | top of page
How is my payoff obtained?
Initially, we will ask you for information about your Mortgage, including your account number and social security number. Then we will attempt to obtain payoff information from your Mortgage Lender. If the Lender refuses to provide us with the information, we will contact you for a written authorization.
back to FAQ's | top of page
How is my Mortgage satisfied on the public record?
After your Mortgage loan is paid in full, your Lender will stamp "paid-in-full" on your original note and Mortgage. They will send the note directly to you. If they send the Mortgage to you, then forward it to us. Once we receive the Mortgage, we will deliver it to the county Office of Recorder of Deeds, who will indicate on the public record that your Mortgage has been satisfied.
back to FAQ's | top of page
What if I get a tax bill or homeowner's insurance bill after the closing?
If you have an escrow account, send it to your Lender immediately. If you don't have an escrow account, it is your responsibility to pay the bill.
back to FAQ's | top of page
What if my Mortgage payments are automatically deducted?
You must call your Mortgage Lender immediately and request that they cease the automatic deduction.
back to FAQ's | top of page
What happens to my escrow account?
Most Lenders will refund the balance of your escrow account within three weeks from the date the payoff is received. In rare circumstances, Lenders apply the escrow balance to your payoff, thereby reducing your payoff figure.
back to FAQ's | top of page
What do I need to bring to my closing?
1). Bring your driver's license or some other form of identification. The closing officer will need to prove your identity so he/she can notarize your signatures on many of the documents.
2). If you haven't met all the Lender's conditions, bring any additional documentation they require.
3). If you haven't already provided proof of homeowner's insurance, bring your declarations page. Be sure to let us know whether you've already paid your first year's premium.
4). Don't forget the check for your funds needed to close, if any!
back to FAQ's | top of page |
|
