The Top 4 Items Buyers and Sellers Should Receive Before Closing

If you’ve ever bought or sold a home, or if you’re thinking about buying or selling a home in the future, it’s important to recognize that there are many steps along the way to get to the closing table beyond the initial signatures on the contract. While home inspections, appraisals, and final walk-throughs often come to mind, the title company facilitating the sale of a property also has several steps to complete in the background.

Using a quality title company to get to closing is as important as using the right Realtor, lender or home inspector. Below, we’re going over the top 4 items buyers and sellers should receive from the title company before closing. These items can make or break a transaction and are just as important (if not more!) than other steps along the way to homeownership or selling a home.

• Copy of the Title Commitment- This should be sent to all parties in a real estate transaction to review. It’s the sole responsibility of the buyer to review the title commitment and see if the title “exceptions” are acceptable. Title exceptions are the items the title insurance will not cover. It’s common to see a few of these on title commitments. Most are things like encroachments that show up on a survey, utility easements, and more.

If buyers and sellers don’t understand what the exceptions on the title commitment mean, it’s best to reach out to the title company for an explanation. In severe cases, seeking legal advice is also recommended.

• Municipal Lien Search- This is something the majority of title companies in Pinellas County will order. It’s paid for by the party paying for the Owner’s Title Policy (Customarily the seller, since they tend to pick the title company at contract in Pinellas County).

The municipal lien search includes any water or other utility liens or outstanding balances, special assessments from the municipality, and any code violations (and fines if applicable) that are on file for the property. It can also show any open permits on the property that need to be remedied before closing.

• Estoppel Letter- This applies to homes that are part of an HOA and condo associations. The estoppel letter shows the amount of dues that will be paid (monthly/quarterly/annually), if there are any special assessments due or coming due, if HOA or condo approval of the buyer is required, and if the association is involved in any litigation. It’s especially important for buyers to review this document prior to closing to avoid any unexpected costs.

• Survey- This is almost always required by lenders to be completed prior to closing. For buyers using cash to purchase their homes, we always recommend getting a survey as well.

A survey shows the home or building on the land that’s being purchased, plus all easements, including utility, drainage, and building setback lines. Surveys also show all encumbrances on the property, including fences, sheds, buildings, pools, decks, patios, and more. This is important, as if there is ever a property line dispute between neighbors, the survey can show exactly who owns the disputed portion of the land. Surveys also show encroachments, meaning if a neighbor is illegally occupying an adjacent property with a fence, personal items, or past construction modifications, the buyer will be made aware of this before closing and all parties can address the issue accordingly.

For more information about what to expect when buying or selling a home, feel free to reach out to us at (727) 400-3315 or MESSAGE US HERE.