What to expect from your Cape Coral or Fort Myers title insurance company

There are many expectations that we have of people we do business with. Here we outline what you should expect from your Cape Coral or Fort Myers title insurance company. A title company should not be looked at like you are going to McDonald’s for lunch. They are working for you on your real estate transaction.

The duties of a title company include:

Serving as a neutral party.  – Title agents and employees should not be taking sides as to protect a seller over a buyer. They work for the whole transaction in a neutral fashion.

Receiving authorization for escrow monies. – This can be done through a contract for a purchase. One party will designate the title company to hold escrow from the buyer (usually the seller).

Following instructions precisely and in a timely manner. – The seller, buyer, real estate agents and lender all have some instructions that will pertain to closing. It is important for the title company to work with these given to have a smooth transaction.

Paying bills as authorized. – A title company will be given invoices to pay through a closing. They will advise if this is able to be done or not.

Provide an accounting for the transaction. – All fees that will need to be collected or disbursed and paid will need to be shown on a settlement statement (HUD1).

Disbursing of funds. – It is most important that the funds be disbursed according to the settlement statement.

Transferring title and recording liens. – A title company should be sure that all documents are processed correctly in the correct county for transferring of property.

If you are ever unsure about a process, you should get a second opinion. Although you may be tied to the title company you are using, you should know what is expected from the one you use.

How To Select A Title Insurance Agency

Between contract negotiations, title searches and home inspections, selling a home can be nerve-wracking. To add to your tension level, once you’ve accepted the offer, everything is out of your hands. A title insurance agency will get involved at this point and start the background work needed to get the closing to fruition. However, there is no reason for you to feel completely out of the loop at this point. By selecting a title insurance agency that you feel comfortable with and who has a friendly and knowledgeable staff, your closing fears can be alleviated.

You Have The Right To Choose Your Title Insurance Company

In Lee County, Florida, sellers have the right to choose which title company handles the real estate closing. At our Cape Coral title insurance agency, we often see sellers who have been referred to us by their realtor or friends and family. Indeed, many times sellers do simply go with whichever agency is recommended to them. This usually works out just fine, but if you are ever uneasy about a title insurance agency or feel like you won’t get the service you desire throughout the closing process, you should shop around and find a different agency to handle the closing.

What To Look For When Selecting A Title Insurance Agency

When selecting a title agent to handle your closing, you will want to check their level of experience. The company you choose should be licensed in the state in which you are purchasing. Ideally, you will live nearby so you can easily drop materials off at the agency or pick things up if you need to. The company should have appropriately sized staff for the amount of business they do.

It is also helpful to have as many services housed under one roof as possible. An agency that can provide escrow services and notary services will make things much easier for you. With title insurance, escrow and notary services under one roof, you can rest assured that all necessary paperwork and forms will be on hand at closing time.

In-House Florida And Cape Coral Notary Services

Throughout Florida and in Cape Coral, notary services are necessary at any real estate transaction, which is why we have a full-time notary public signing agent on staff in our office in Fort Myers. Notary publics must sign and witness many documents in a real estate transaction which is why it makes sense for title agencies to have them on staff.

Above all, the agent and supporting staff should be approachable. You should feel comfortable asking questions and contacting the agency with any concerns you have. You are selling a home or property, and you should be confident and comfortable with the entire closing process.

Understanding Your Real Estate Title Search Report

As part of your property purchase in Fort Myers or Cape Coral, a real estate title search was likely done on the property.  The report provides important information about the property and it’s allowed uses.  Understanding the report is essential for your enjoyment of the property.

Conducting A Title Search

More often than not, a real estate title company, like Title Junction, performs the title search.  Title Companies have extensive experience doing these searches, are familiar with the records that need to be searched and where those records are located.  It helps to have a local real estate title company perform the search for you since they are knowledgeable about local practices, laws and regulations.  In many cases, the property could be filed under different names.  It may be filed under the current owners name, the property tax ID number or the property address.  A local real estate title company will be familiar with these idiosyncrasies.

What’s Involved In A Title Search?

Real Estate title searches consist of detailed research into the history of a property.  The research will include an examination of past ownership and mortgages, surveys, maps, easements, taxation values, zoning, rights-of-way and flood zone status, to name a few.

The main objective of a title search is to determine if there are any not readily obvious restrictions on the property that would prevent the buyer’s full use of it.  Some of the more common restrictions are tax or contractor liens, which may negate the sale of the property until the liens are paid in full.  Other restrictions that a buyer might not be aware of ahead of time could include limitations on use put in place by a homeowners association or right-of-way or easement usage.

Title Searches Safeguard Your Purchase

The main objective of a title search is to make sure the property is legally available for sale by the seller.  A title search will reveal the current and past owners, reveal any outstanding liens against the property and identify anyone who may still have claim to the property.  Ensuring the property is available for sale safeguards your investment.  Most mortgage lenders will require a title search to safeguard their own investment in the property.

What To Expect From Your Report

Your title report will likely consist of the following, or similar, categories:

~ Deed information
Deed information will indicate who currently has ownership or interest in the property.  You should expect to see the name of the current owner in this section.

~ Tax Information
The tax information section will provide you with the most recent year’s property tax amounts and whether or not they’ve been paid. Along with and tax certificates that may have been issued. Taxes are paid to the county where the property is located; Lee County for Fort Myers and Cape Coral.

~ Liens or Judgements
Outstanding liens or judgments against the property will appear in the Judgments and Liens section.  Hopefully, nothing will appear in this section but if it does, take note.  These are the items that you will want taken care of before closing on the property.

~ Mortgage/Deed of Trust
Under the Mortgage/Deed of Trust section you can expect to see the outstanding mortgage amounts owed by the current owner.  Once the sale has been completed, these mortgages will cease to exist and your own mortgage amounts would appear if a new title search were conducted.

 Interpreting a real estate title report is a simple process, but it is a vital one.  You’ll want to make sure you understand what you are reading and ensure any discrepancies are rectified before you close on the property.

FIRPTA (Foreign Seller) “Cheat Sheet”

What is FIRPTA?

FIRPTA is the acronym for Foreign Investment in Real Property Tax Act of 1980 that deals with the disposition of a US real property interest by a foreign person or a foreign corporation.

 How do I deal with a FIRPTA transaction?

If the seller is a non-resident alien meaning no social security number or resident alien card (green card).  Proceed as follows:

Property sale price is over $300,000.

     1. Foreign Seller must have a tax ID number or ITIN (Individual Tax Identification Number).  If the seller does not have an ITIN they are to see an IRS approved acceptance agent to fill out a W7 form and bring the original to the title agent.  The original W7 form, a check in the amount of 10% of the sale price, Form 8288 signed by the buyer and a copy of the HUD-1 must be sent to the IRS within 20 days of closing.  If the seller does have an ITIN send a check in the amount of 10% of the sale price, Form 8288 signed by the buyer and a copy of the HUD-1 to the IRS within 20 days of closing.

2. Foreign buyer purchasing from a Foreign Seller- both parties must have an ITIN.  If the buyer does not have an ITIN they are to see an IRS approved acceptance agent to fill out the W7 form, and then bring the original to the title agent.  The original W7 form for the byer must be submitted to the IRS with the documents listed above.

Property sale price is $300,000 and under.

1. The 10% does not have to be withheld if the seller is a non-resident alien and the buyer signs an affidavit stating the purchase price is $300,000 or less, the property will be their personal residence, the buyer or buyer’s family member will occupy the property at least 50% of the number of days the property is in use during each of the first two 12 month periods following the date of purchase and the buyer is a U.S. citizen.

2. If the buyer refuses to sign the affidavit 10% must be withheld and sent to the IRS.  If this is the case follow the same steps for properties over $300,000.

FIRPTA withholding does not apply to anyone who is a US Citizen or a resident alien as they will have a Social Security Number.

 FIRPTA withholding is not a tax, it is just that, a withholding.

The 10% withholding is never taken from the buyer’s funds, it is a seller charge only.  We always suggest the foreign seller seek the advice of an accountant prior to closing.

Title Insurance Agencies And The Foreign Investor

With the myriad rules and regulations governing United States real estate transactions, it is no wonder that a foreign investor or seller has questions.  Sometimes the regulations make sense to investors and are similar to the laws in their home country.  Other times, the laws are unique to the U.S. and leave the foreign investor with more questions than answers.

One way to navigate these regulations and make sure your real estate transaction goes smoothly is to work with a professional real estate title insurance agency.  Title insurance agencies are separate from the real estate company and the mortgage lender.  In fact, the primary role of the title agency is to remain impartial to all parties involved in the transaction.  Their primary role is to make sure the closing happens and that everyone involved meets all obligations.  If you are looking for impartial assistance with your real estate investment, you can’t go wrong consulting a title agent.

Foreign Seller Services

Our Fort Myers and Cape Coral title insurance agency handlforeignworldpicturees many real estate transactions involving foreign sellers and investors each year.  Being located in Florida, we have many clients who enjoy vacation homes in the state, which keeps us current on foreign seller real estate regulations like FIRPTA.

The Foreign Investment in Real Property Tax Act of 1980, as FIRPTA is properly known, requires the foreign seller of any property (other rules apply) to withhold 10% of the purchase price and remit it to the IRS for tax purposes.

A title agency can help with this in several ways.  To begin with, the seller must be identified as a foreign seller for FIRPTA to have an impact on the sale.  Title Junction can verify identities and can be counted on to verify if the sellers involved in the transaction indeed qualify as a foreign seller.

Many title agencies also act as the escrow agent in the real estate transaction, which would allow the agency to withhold the 10% tax and remit it to the IRS on behalf of the seller.

All-In-One Convenience

Our foreign seller clients often appreciate the convenience of having all real estate title and title insurance needs under one roof.  Closing, title insurance, escrow and notary services in one location help make the transaction go smoothly.  A title agency can also:  help a foreign seller or foreign investor navigate real estate and closing terminology, assist with communication between buyers and sellers, their agents and their lenders and ensure both parties meet the legal requirements of FIRPTA.

Finding A Qualified Agency

When buying or selling a property, it is important to have both a title agency you can trust and one with the experience you need.  This is especially true if you are a foreign seller in the United States.  You can find qualified agencies through referrals from your realtor, mortgage lender and friends and family, the Better Business Bureau and the local Chamber of Commerce.  Finally, be sure your agency is professionally recognized and up-to-date with all current rules and regulations governing the real estate industry.