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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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COLONIAL REALTY INC.
1007 Skyway Hwy.
Atchison, KS 66002
Phone (913) 367-4464
Email: colonial@coloniallistings.com

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"Sharon was very helpful and persistent in selling my home. Sharon and Bob Hanf did an amazing job keeping me in the loop of what was happening with my property and stayed in contact even if there was nothing to report. I really appreciated the dedication and consideration I consistently received throughout my entire experience. I would highly recommend Sharon or Bob or any of the realtors at Colonial Realty over any other realtors for certain. #honest #forthcoming #diligent #persistent #trustworthy #followthrough" 4/4/2017 bretthuskamp
We would just like to take this opportunity to Thank Bob Hanif for helping us find our dream home here in Atchison. He was so helpful and kind and went above and beyond for us which is really refreshing these days. We would highly recommend him if you are looking for an Excellent Realtor and an all around honest Professional with a great work ethic that genuinely cares about what you are looking for and won't stop until you find the home or property that is amazing! 10/2/2016 The Banister Family
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Very knowledgeable and understanding to my needs. No pressure and made good on all he promised quickly responded to all questions. was more than willing to work around my schedule and my needs for appointment times. 08/23/2016 SAGE6060
What a wonderful experience buying a house! In a very short period, Bob showed us multiple homes and went above and beyond in providing honest and genuine input for a completely professional experience. Best realtor experience I've had!! 07/18/2016 peggystarr9
Kyle helped me sell my home August of last year. He was very professional and easy-going. He made the process a lot easier for me to understand. There was even an issue a day of closing, at no fault of his own, but he was able to solve the problem and close the house on time. I highly recommend him as an agent. Thanks again. 07/11/2016 RiswR1991
Our experience with Kyle was one we will always greatly appreciate. He went above and beyond to sell our home, and spent so much time helping us to buy the right home that fit our needs. We are certain that Kyle will be the next top agent in Atchison and other surrounding areas. Thanks Kyle!! Your the best!! 07/06/2016 csickler2
Kyle was my agent in closing two real estate purchases in the last year and was very efficient and professional. He guided me through the process each time, gave me tips, kept me appraised on the progress of the sale, answered any questions I had and was present at the closing. I would recommend him highly! 06/29/2016 mwalters1022
I would recommend Sharon Locke to anyone looking to buy or sell in Atchison. Sharon was our seller's agent on a recent transaction and she made the process very easy and successful. I appreciated her insight regarding staging our home and her knowledge of how to market the property at its best. Atchison is a difficult market for sellers, but we had over a dozen showings. After only 13 days on the market, we accepted a very good offer. I credit her expertise with making that happen. Throughout the process, Sharon fielded our many questions and helped guide us to closing. We appreciated her professionalism and attention to detail; nothing escaped her attention. From receiving an offer to closing day, she looked out for our interests and ensured that we had everything in order so we could close on another property the following day. In sum, I'm glad that we trusted Sharon with our real estate transaction. 05/25/2016 bobchilders9
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