First Time Home Buyer's Guide
to Title Insurance & Final Settlement
You don’t need help answering fluffy questions like what kind of neighborhood do you want, or what’s the difference between an adjustable rate mortgage and a fixed rate mortgage? But if you can grasp these 5 points, you'll be better prepared going into the homebuying process than the last generation was.
5 Things Our Parents Wish They Knew
1. The Buyer Chooses the Settlement Company
And those who shop around can save a bundle!
As many Pennsylvania homebuyers are starting to realize, you have the right to shop around and designate which settlement/title insurance company you want to use. It's the law. It's important to remember you're not obligated to use your lender's or real estate agent's in-house service providers and should take the time to compare quotes and services offered before agreeing to hire anyone.
The Role of Your Title Insurance/ Settlement Company
There are four main categories of services that most settlement companies provide. Here’s a breakdown along with what you should expect from them.
2. Title Insurance does NOT cost the same everywhere
Pemiums are fixed, but service fees will vary.
Don’t be fooled… Although title insurance premiums are filed with the state and for the most part are non-negotiable, you can still save hundreds of dollars in miscellaneous title fees by shopping around. Often times real estate brokers/agents and sometimes lenders, will have a profit sharing arrangement with the title insurance company that they’re referring you to. The result of these business arrangements… inflated and additional fees passed onto the consumer.
Why shopping around for title insurance is time well spent.
Consumers who shop around and compare services and fees will save substantially.
3. It's possible to REDUCE your closing costs.
Negotiate fees simply by asking questions.
When you’re buying a new house, the actual house itself isn’t the only thing you’re paying for—there are a number of fees that are rolled into the final price in order to make it officially yours.
The three primary players who will assist you with the purchase of your new home are your lender, your real estate agent/broker and your settlement/title company. So it stands to reason that these are the three places to start asking questions in an effort to find potential savings on your home buying expenses.
Which Fees Are Negotiable?
While many closing costs are unavoidable, there are some fees that can be negotiated down, waived, or avoided altogether.
4. Settlement doesn't need to take all day!
If you are well prepared, you are in and out in under an hour.
If you, your lender and your title insurance / settlement company are on the ball, settlement will be a breeze. You can do your part by coming to settlement prepared. Here are the main legal documents you'll most likely be signing or reviewing at the settlement table.
Settlement Day Checklist
Appraisal is complete, all of the inspections are finished and your mortgage lender and title insurance company are making sure that all of the i’s are dotted and t’s are crossed for settlement. Here is a checklist to make sure that you are also prepared.
5. How you take title to the property should not be an afterthought.
When you purchase real estate, one of the decisions that you’ll be making is how to take title to your new property. There are different types of tenancy, and the one you declare on the deed is actually quite important. The type of tenancy indicates how the ownership is legally structured and how the property's ownership will be handled after one of the tenants is gone. Your title company can help you understand your options so that come settlement day, you're not rushed through this very important decision.
Have Questions? Ask an Expert!
Text, email or call our office and get answers to your real estate questions 24/7! Read questions submitted by others and view our answers. You'll be surprised!
Save up to $700 or more at the settlement table!
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No closing / settlement fee
No doc prep fees
Real estate attorney on staff
No miscellaneous title fees
No processing fees*
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*Rather than pay a real estate company a broker service / conveyancing fee, which averages $350-700, let ALT process your transaction at no charge.