TITLE INSURANCE

Here are just a few links to other companies that we've either worked with in the past or heard good things about.

Cape Coral Title Insurance Agency, Inc - (239) 540-1555 - http://www.capecoraltitle.com/ - 1307 Cape Coral Pkwy E., Cape Coral, FL 33904  

OmniOne Title Services, LLC – (239) 549-3087 - 4707 SE 9th PL., Cape Coral, FL 33904  

Entitled, LLc. – (239)-221-0504 - 2180 West First Street, Suite 530, Fort Myers, FL 33901  

Title Professionals of Florida – (239) 433-2900 - 13241 University Dr. Suite #103, Fort Myers, FL 33907  

First American Title Insurance Co. – (239) 330-3325 - 9990 Coconut Rd 1st Floor, Suite #345, Bonita Springs, FL 34135  

Sunbelt Title – (239) 263-6800 - 850 6th Ave S., Naples, FL 34102   

TITLE INSURANCE

When you purchase a home in Florida, you are really purchasing the title to the property, which gives you the right to occupy and use the space. The transfer of clear title with no cloud or encumbrances the day of closing is the goal.  Any clouds on the title must be resolved before any transfer of title can occur.

Florida law does not require an attorney to perform the closing process, although most Real Estate attorneys provide those closing and title services.  Many real estate transactions are completed and closed by a Title Company after the negotiations between the buyer and seller via their two real estate brokers.  

The title insurance company is an independent entity in the sale of real estate. It does not represent either the buyer's or the seller's interest. The company's role also does not include legal advice on the ramifications of potential issues that may develop with the title search results. Only licensed attorneys can offer legal advice.

Once the contract is signed by both the buyer and seller, the closing company takes it from that point forward. In a nutshell, the closing company is responsible for clearing the title, closing on time without any errors and providing you with an overall enjoyable "closing experience". The title company's primary responsibilities include:

● Holding the earnest money deposit in an escrow account (if applicable)

● Running a title search and performing an examination of the title

● Working to clear any potential title issues

● Ordering any necessary payoffs, estoppel letters, municipal lien searches, surveys, etc.

● Preparing all necessary documents to clear and transfer title

● Coordinating the day and time of the closing with all parties involved in the transaction

● Facilitating the signing and notary of all required documents

● Recording the necessary documents after signing including FIRPTA (if applicable)

● Issuing any title insurance policies

As you can probably gather from the list above, the title insurance company also plays a significant role in a Florida real estate transaction. By reading more below, you'll understand why.  

TITLE SEARCH

What is a title search?

A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes and many other documents. The purpose of the search is to verify the seller’s right to transfer ownership and discover any claims, defects and other rights or burdens on the property.

What kinds of problems can a title search reveal?

A title search can show several title defects and liens, as well as other encumbrances and restrictions. This can include unpaid taxes, unsatisfied mortgages, judgments against the seller, and restrictions limiting the use of the land as well as many others.

Are there any problems a title search cannot reveal?

Yes. There are some “hidden hazards” even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his or her marital status, resulting in a possible claim by a legal spouse. Other “hidden hazards” include fraud and forgery, defective deeds, mental incompetence, confusion due to similar or identical names, clerical errors in the records and many more. These defects can arise after you’ve purchased your home and jeopardize your right to ownership, unless you have title insurance to protect that right.

How much does a title search cost in Florida?

The cost of a title search in Florida is typically the seller’s responsibility and ranges anywhere from $150 to $1500, depending if it’s a residential or complex commercial title search and examination. The fee will be a separate line item on the Settlement Statement, which outlines all the related costs and specifies who pays which fees. If you’re wondering how much your title search will specifically cost in Southwest Florida, contact a reputable local Title Company and they will be happy to help you.

TITLE INSURANCE

What is title insurance?

Title insurance is insurance that protects the buyer of a property in case there are issues with the property not uncovered in a title search.   There are two types of title insurance. One protects a lender and the other protects the buyer. They might be referred to as owner's title insurance and lender's title insurance.

If a claim is made against your property in Florida, title insurance will, in accordance with the terms of your policy, assure you of a legal defense — and pay all court costs and related fees. Also, if the claim proves valid, you’ll be reimbursed for your actual loss up to the face amount of the policy.

Is Title Insurance Required in Florida?

Any federally insured lender will require you to have at least a loan (lender) policy. Chances are good you will not be able to get a loan without having title insurance that protects your lender.

An owner's policy is not required in the state of Florida. As long as the lender is protected with a loan policy, you are free to go ahead with the closing. Keep in mind, however, having title insurance in place that protects the lender doesn't mean you, as the buyer, are protected. In fact, if an issue comes up that brings the legality of the property you're buying into question and you aren't protected by owner's title insurance, you are at risk of losing the property and all of the money you've put into it, even if a claim comes up many years later.

If you've purchased title insurance for yourself, as the buyer, and not just for the lender, you are protected. While a title agency does the research to make sure a home or property is free and clear and that the seller has legal rights to possess and sell the property, there are many instances where the title search doesn't reveal all issues. These issues are known as title clouds.

Even if you believe a title is free and clear and that the seller has the legal right to sell the property, there are many unforeseen issues that might even be unknown to the seller of the property.  The property you're going to purchase could be titled as joint tenancy or tenancy in common. There could also be a right of survivorship claim, meaning there is another party who could claim the property if one owner passes away. 

Other reasons a title might be clouded include, but are not limited to, liens of any kind, including construction liens, tax liens, and any lien where the house might have been used as collateral. Other issues can include foreclosures, instances where the house or property may belong to someone else through inheritance, and eminent domain.  Utility easements and access rights are a common issue especially when working with acreage properties.

How much does title insurance cost in Florida?

The cost of title insurance in Lee and Collier County, and other South Florida counties, vary based on the purchase price of the property. Unlike other insurance premiums, which must be paid annually, a title insurance premium is paid one time only at settlement. Florida’s title insurance premium is based on a promulgated rate calculation, which is determined by the state of Florida. Florida’s title insurance premium is also determined based on the purchase price as follows:

● Purchase Prices up to $100,000: $5.75 per thousand

● Purchase Prices Over $100,000: $5.00 per thousand So, for example, a property worth $100,000 would have a title insurance fee of $575, while a $200,000 piece of property would have a $1,075 title insurance cost.  A professional, local provider can help calculate the exact costs of your Florida title insurance.

Who pays for title insurance at closing in Florida?

In Florida, the person responsible for paying title varies per county and can be negotiated in the contract. In most counties, the seller generally pays for the title insurance and chooses the title company. However, the buyer generally pays for title insurance and chooses the title company in the following counties:

● Sarasota County

● Collier County

● Miami-Dade County

● Broward County

Who chooses the title company in Florida?

The person responsible for choosing the title insurance company is typically the person who pays for the Owner’s Title Insurance Policy.  That said, the party not paying for the Owner’s Title Insurance Policy can make a counteroffer that includes a new proposed title company if they’re passionate about using a specific closing firm. Since the seller customarily pays for the new Owner’s Title Insurance Policy in many counties in Florida, it should give them the right to select the title company.  In Miami-Dade, Broward, Sarasota and Collier counties, where the buyer customarily pays for and chooses the title insurance company, this may not be an issue.

TITLE TRANFERS

Is title insurance transferable?

No. Title insurance is never transferable when the ownership of a property changes, and it similarly can’t be assumed by a new owner. In fact, a title insurance policy itself terminates when the legal title on a property changes.

How do you transfer a title in Florida?

Transferring a title in Florida is quite simple — assuming the title is unencumbered, meaning there are no competing claims or liens on the property. In these cases, a simple Quitclaim Deed could be used to transfer the title of the property to the new owner. Although a Quitclaim Deed can be a quick solution, a Warranty Deed and title insurance are always recommended due to   potential transactions involving unauthorized title transfers and title fraud.

What is the cost of title transfer in Florida?

The fees related to title transfer in Florida are actually called “documentary tax stamp rates,” and they’re included in closing costs — typically paid by the seller, though this is negotiable. The documentary tax stamp rates are uniform throughout the state with one exception: Miami-Dade County. The tax in most Florida counties is $0.70 for every $100 of the home’s purchase price, which is also known as the deed’s consideration. In Miami-Dade, that rate drops to $0.60 per $100. For example, if you purchase a home through most of Florida for $250,000, the documentary tax stamp rates will be $1750. If you purchase a home in Miami-Dade for the same price, the documentary tax stamp rates will be $1500.

THE CLOSING

What is a closing?

Closing, also known as “settlement” or “escrow,” is when all necessary documents are signed, the title to a property is transferred from seller to buyer and the keys are exchanged. Closing is typically held in the title company’s office and involves the completion and execution of all documents to finalize the transaction between buyer and seller. Even though a closing is typically held in the title company's office, it's becoming more commonplace in today's digital age for all parties to be in different locations when signing documents.  In addition, all financial issues are settled at closing, referred to as closing costs. Proceeds are sent to the seller and the necessary documents are filed in the public records, which successfully transfers the title.

What are closing costs?

Closing costs are all the fees required to close the real estate transaction. They can include:

● Loan points

● Loan origination fees

● Private mortgage insurance (PMI)

● Title insurance

● Attorney fees

● Closing fees

● Recording fees

● Surveying fees

● Property taxes

● The balance of your down payment

Prior to closing, review your final Settlement Statement to ensure all the calculations are correct, including credits for past deposits and any other agreed upon buyer and seller credits. Also recheck all lender, title and escrow fees to make sure they’re accurate.

What is FIRPTA?

It is one more issue a title professional can help navigate when purchasing real estate in the United States.  People from all over the world invest in US real estate, and if you are buying property from a foreign owner, here are some things you need to know.

The Foreign Investment in Real Property Tax Act of 1980, also known as FIRPTA, may apply to your purchase.  FIRPTA is a tax law that imposes U.S. income tax on foreign persons selling U.S. real estate.  Under FIRPTA, if you buy U.S. real estate from a foreign person, you may be required to withhold 15% of the amount realized from the sale. The amount realized is normally the purchase price.  The withholding is how we collect U.S. tax owed by foreign sellers.

Here's how FIRPTA works.  If the law applies to your purchase, then within 20 days of the sale, you are responsible for the filing of Form 8288 with the IRS.  Along with the form, you submit 15% withholding.  The completed forms and funds can and should be processed by the closing company whether Title Company or Attorney handling the closing.  It is important to know about FIRPTA, because if you do not withhold the required amount, file the form on time, and submit the withholding, penalties do apply.

There are some exceptions.

For example, FIRPTA law does not apply if you are buying a residence for $300,000 or less or the property is not a U.S. real property interest.

To learn more about FIRPTA, including whether the law applies to your purchase, visit www.irs.gov and type FIRPTA into the search field.  You can also get a copy of Form 8288 on IRS site at the Forms and Publication page.  The forms come with instructions.

Note:  The tax rate increased from 10 percent to 15 percent in December of 2015.