What does a Florida title company do?
A Florida title company is responsible for coordinating the interest of all parties to a real estate transaction, including the buyers, sellers, mortgage lenders, real estate agents, lien search companies and surveyors. A Florida Title Company makes sure that all requirements for settlement are fully satisfied prior to closing.
After each purchase and sale contract is entered into, it is sent to the Florida Title Company for its review and to begin the title and closing process, which involves all of the following steps:
- Title search: The Florida Title Company researches the title to the property through a title search, which provides a history of the property and its prior and current ownership. It is the job of the Florida Title Company to examine the title to the property and to clear any liens, claims or other so-called title clouds on the property so that the new buyer receives clear and marketable title to the property they are buying.
- Survey: Most lenders require a survey when a single family home is being purchased. Even if a buyer’s mortgage lender does not require a survey it is always recommended that the buyer obtain a survey to make sure there are no issues with boundary lines or encroachments affecting the property. The Florida Title Company will review the survey for any potential issues, and will notify the new buyer, its lender, and the real estate agent of any issues with the survey. The Florida Title Company will provide the new buyer with a copy of the survey at closing.
- Property taxes: The Florida Title Company will verify with the taxing authority that the property taxes have been paid. On the HUD-1 Settlement Statement, the Florida Title Company will prorate the amount of the taxes based on the billing period and the date of the closing.
- Title insurance commitment & policy: The Florida Title Company will prepare the title insurance commitment from the title search report and, after the closing, issue both the owner’s and lender’s policies of title insurance. There are two types of title insurance: Lender’s which is required by the mortgage company, and protects the lender’s investment in the property; and Owner’s, which protects the new owner’s ownership interest in the property. It is strongly recommended that all buyers receive an owner’s title insurance policy which protects them against any unforeseen claims, hidden risks, or fraud against the property.
- Loan documents: The Florida Title Company coordinates with the mortgage lender to receive all of the loan documents in time for closing. Once the loan documents are sent by the mortgage lender to the Florida Title Company, the Florida Title Company reviews all of the mortgage lender’s forms to comply with the mortgage lender’s closing instructions. With the lender’s closing instructions, the Florida Title Company prepares the HUD-1 Settlement Statement and sends same to the mortgage lender for its approval prior to closing. The HUD- 1 Settlement Statement details all of the costs of the buyer and the seller in connection with the purchase and sale of the property. The Florida Title Company also prepares the Warranty Deed, Bill of Sale, Closing Affidavits and other documents required in connection with the closing.
- Closing & post-closing: At the closing, the Florida Title Company explains all of the documents to the parties involved in the transaction prior to signing. Settlement typically takes about one hour to complete. After the closing, the Florida Title Company disburses all of the monies collected at settlement in accordance with the HUD-1 Settlement Statement and pays off any existing mortgages on the property. The Florida Title Company also delivers the signed Warranty Deed and any Mortgages to the County Recorder’s Office for recording in the public records promptly following closing.