SETTLEMENT
Title insurance protects you for defects on the title to your home. Want to know how? Read the below.
We recommend using experienced title companies with attorney management for settlements. The home buyer has the right to select the title company. New home builders will offer incentive to use the title company that prepared the subdivision and permitting package for the community. This is acceptable since these new home builder is not causing our buyers to incur any added expense by using their recommended title company.
Title companies' fees are modest for the protection provided. Title companies make most of their money by issuing title insurance. Title insurance premiums are filed with the states and regulated to protect the consumer.
Settlements are necessary and, while you may not understand the document, the title companies in Maryland and Virginia that we work with are experienced and charge reasonable prices.
Maryland and Virginia permit licensed Settlement Companies to conduct settlement under the supervision of an attorney. Most settlements in Virginia will be conducted by an attorney. Some title companies in Maryland also conduct settlements by attorneys. We will be there to answer any questions for you about the settlement process.
Settlement - A term used in Maryland and Virginia for the "settlement" or "closing" meeting where the new owner pays their money, including proceeds of the mortgage loan, and their down payment and accepts the deed to their newly purchased home.
Settlement Costs and Helpful Information
Title: "As generally used, the rights of
ownership and possession of particular property.
In real estate usage, title may refer to the
instruments or documents by which a right of
ownership is established (title documents), or it
may refer to the ownership interest one has in the real estate." Source: HUD
WOW! ! ! That sounds awesome. But, all it means is that you own the property and there is a record of that ownership in the land records of the court house of the county in which your home is located. It is public information for all the world to know.
Put simply, title is the foundation of property ownership. It is the owner's right to possess and use the property.
But, before you actually have title, you will have a settlement meeting with a title attorney or settlement officer at which all of the financial transaction will be recorded. The deed, mortgage documents and any other necessary documents will be signed. You will also pay the balance of your down payment and closing costs. You'll receive the keys to your newly purchased home.
Documents To Save
By all means, save the HUD-1 Settlement Statement. This is proof of any tax deductible expenses you may have incurred along the way such as origination fee, discount points, pre-paid interest. Consult your tax advisor for legitimate tax deductible items.
Documents Involved In The Settlement Meeting
Deed: This is the proof of ownership which will be recorded and it will have the legal description of the property you have purchased.
Deed of Trust or Mortgage: This document is your agreement to repay your mortgage loan. It will be recorded in the land records along with your deed. You own your home, but you have a lien against it.
Survey: The title office will order a survey of your property (sometimes not condominiums) showing the boundaries of your properties, any structures including fences on it and the distances from the structures to the boundaries.
Title Inspection: This is the title attorney's verification that he has review the land records of the property and that there are no liens or encumbrances and you will receive a clear title to the property. Any liens discovered during the "search" of the records must be paid off or removed prior to transfer of title. Some liens or encumbrances could be unpaid taxes, unsatisfied mortgages, judgments, or restrictions on the use of the land.
Once the title attorney has reviewed the title and is satisfied that a title free of defects can convey, he will insure the title against claims. Title insurance is your policy of protection against loss of any claims that may arise in the future. The title insurance policy will protect you and your heirs for as long as you own the property and sometimes beyond.
What Should I Expect At Settlement?
In Maryland and Virginia, buyers and sellers along with their agents and attorneys, if any, and the title attorney will meet around a table and the documents will all be explained to you in as much detail as you wish. You sign the necessary document and the sellers sign the necessary document. You receive your keys and everyone shakes hands. Our settlements are usually very friendly with sellers telling buyers little tips about the house, i.e., operation of the security system, who is a reliable heating/air conditioning service company, who is a good plumber, etc. Any potential problems should have been settled prior to the settlement meeting.
WARNING: Unless proper Power of Attorney is in place, all parties to the transaction will have to sign in person. A photo I.D. will be required by the title attorney. We had a husband travel 500 miles to settlement without his wife, a co-purchaser, thinking that he could just sign for her. No, no, no. All parties to the transaction must sign. If any or all parties are out of town, arrangements can be made to have deeds and deeds of trust over nighted for signature. If a person cannot attend because of an emergency, we can arrange for a Power of Attorney for someone to sign for them. It has the full force of law and is often done. Talk to us if special arrangements are needed. We can help.
Enjoy Your Home!
Homefinders.com agent will be with you at settlement in Maryland and Virginia.
We'll review the HUD-1 Settlement Sheet and make sure everything is correct.